The Federal Financial Supervisory Authority (BaFin) has warned Binance of a possible violation of securities laws when it launches tokenized stock trading.
On April 12, the cryptocurrency exchange announced the launch of a new service.
Two weeks later, the Financial Times announced that regulators in the UK and Germany had checked its compliance with local legislation. Then Binance announced that the tokenized shares are processed by the regulated investment group CM-Equity and comply with the provisions of the second edition of the EU Markets in Financial Instruments Directive (MIFID II).
The BaFin document states that the tools are being implemented by Binance Germany GmbH & Co. According to the regulator, this firm offers “securities in the form of TSLA / BUSD, COIN / BUSD and MSTR / BUSD tokens without the required prospectuses on the website.” BaFin stressed that CM-Equity is not mentioned in the marketing material.
“A public offering of securities without an approved prospectus is a violation of the EU Prospectus Regulation”, – said the regulator.
BaFin did not specify what decision it will make regarding Binance, but did cite potential penalties in such cases. – € 5 million or 3% of revenue for the last financial year. Also, the law allows for an additional recovery of double the amount of the profit received.
Recall that on April 26, Binance announced the listing of tokens backed by a portfolio of real shares of Microstrategy, Apple and Microsoft.
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