Cryptocurrency exchange Binance not licensed to sell stock tokens in Hong Kong, says markets regulator SFC
- No entity in the Binance group is licensed or registered to conduct ‘regulated activity’ in Hong Kong, says Securities and Futures Commission
- Hong Kong plans to bring in legislation requiring all cryptocurrency exchanges in the city to be licensed and only to offer services to professional investors
The move followed other warnings to Binance from regulators in Italy, Thailand, Japan, Germany and the United States.
Stock tokens are virtual assets that are represented to be backed by depository portfolios of underlying overseas listed stock.
The SFC said these were likely to be “securities” under Hong Kong rules, and so it may also be an offence to offer them to the Hong Kong public without its authorisation.
“The SFC does not tolerate any violations of the securities laws and will not hesitate to take enforcement action against unlicensed platform operators where appropriate,” said Thomas Atkinson, the SFC’s executive director of enforcement.
A Binance spokesperson said it does not currently hold exchange operations in Hong Kong.
“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion,” the spokesperson added.
In a separate statement on Friday, Binance said it would stop selling stock tokens.
Binance last month was the world’s biggest exchange by spot trading volumes, data from UK researcher CryptoCompare showed, with trading volumes reaching US$668 billion – a near tenfold jump from July 2020.
The platform offers a wide range of services to users across the globe, from cryptocurrency spot and derivatives trading to digital wallets and stock tokens.