BaFin: Trading tokenized shares on Binance may violate the rules


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The German Federal Financial Supervision Authority (BaFin) has warned investors about possible violations related to the offer of tokenized shares on the Binance cryptocurrency exchange.

On Wednesday, the regulator posted a notice on its website stating that the tokens linked to Tesla, Coinbase and MicroStrategy shares are securities. This obliges the issuer to supply them with a prospectus, which has not been submitted before.

BaFin notes that such violations are classified as administrative, and they are punishable by a fine of € 5 million, or 3% of the issuer’s revenue over the last year. In addition, the issuer may be liable for losses of investors, as well as additionally be fined in an amount twice the amount of the received economic benefit. BaFin has the power to prohibit the circulation of securities.


“BaFin has reasonable grounds to suspect that“ stock tokens ”in the TSLA / BUSD, COIN / BUSD and MSTR / BUSD markets are being offered without the required prospectus. We have no evidence that would indicate their exclusion from the requirements for the provision of a prospectus, ”the publication says.


It was revealed last week that European regulators are conducting a scrutiny of Binance over its new service that allows investors to acquire stakes through a German intermediary. CM-Equity, which is the issuer of tokenized shares and, in addition to Binance, works with the FTX and Bittrex exchanges, claims that the trading format does not require the provision of a prospectus. At the same time, the name of the intermediary itself is not given in the BaFin publication. Binance added Apple tokenized shares to its offering yesterday.

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