The German Federal Agency for Financial Supervision (BaFin) has issued an official warning about Binance’s “suspicion of violating” German securities regulation laws.
In mid-April, Binance provided investors with the opportunity to trade stock tokens of Tesla and Coinbase, and by the end of the month launched trading in tokenized stocks of Apple, Microsoft and Microstrategy. Regulators in several countries, including BaFin, suggest the new feature violates securities trading laws. The German federal agency has issued an official warning.
According to the regulator, Binance Germany GmbH & Co. KG offers “token-share securities” without the required notice on the website. Public offering of securities without an approved prospectus is a violation of EU law. Such a statement for Binance Germany GmbH & Co. KG was not, and the proposal is not subject to exceptions to the law.
It is not yet clear what further steps the German regulator will take. However, the warning notes that the company may be fined up to 5 million euros or up to 3% of the turnover for the previous financial year. In addition, a fine of double the profit earned from the illegal offering of securities may be imposed. Earlier it was reported that the Hong Kong regulator may ban Binance from trading tokenized shares.
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