In a press release published on October 4, the German Federal Financial Supervisory Authority (BaFin) stated that it is going to assess whether or not the Binance exchange has violated German securities laws when it offered and sold its own exchange tokens. These tokens were issued under the guise of “utility” tokens, which are allegedly exempt from the strict laws that govern the issuance of securities. However, the BaFin’s statement has made it clear that the laws may be broken in this case.
Summary of the situation
- BaFin points out that the leading cryptocurrency platform, considered the world’s largest, could be fined for offering share tokens.
- Binance could be fined 5 million euros, which equates to $6 million or a fine of 3% of the previous year’s revenue.
In Germany, the financial regulator has warned that Binance could face a fine. BaFin points out that the leading cryptocurrency platform, considered the world’s largest, could be fined for offering share tokens. This could be because BaFin points out that Binance advertises its digital security tokens and has not published an investor timeline.
Binance is a globally recognized crypto currency exchange company. As of Monday, it said it would offer exchange tokens denominated in the same cryptocurrency. It offers investors exposure to Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and MicroStrategy Inc (MSTR.O).
These tokens have joined Coinbase Global Inc (COIN.O) and Tesla Inc (TSLA.O) tokens that are already trading.
BaFin says there is not enough information on exchange tokens
Financial regulator BaFin pointed out the lack of a prospectus for Tesla, Coinbase and MicroStrategy on its website. Such action would have constituted a breach of EU securities legislation, which would have had consequences for Binance as an issuer.
Binance, as an issuer, can be fined 5 million euros, which is equivalent to 6 million dollars or a fine of 3% of last year’s revenues. BaFin correctly pointed out that Binance Deutschland sells share tokens in Germany without offering any advertising or programs to investors.
The regulator has also indicated that investments in securities should be based on a deliberate program. It is also not known if there were flyers or advertisements for other tokens traded at the exchange.
This crypto currency exchange company is very responsible and always expects to fulfill its obligations. They take their work seriously and strive to comply with the laws and regulations of the local regulatory authorities in the countries where they operate. A Binance spokesperson said the company is working with regulators to resolve any concerns and issues.
Advice of the UK Financial Services Authority on Binance smoking
Binance is an established cryptocurrency exchange platform that operates in several markets, including the UK. It is a platform where you can exchange more than 100 digital coins, and it is one of the companies with the largest number of commercial transactions in the world.
The UK Financial Services Authority has also commented on Binance’s tokens. A spokesman for the agency said the company offers various regulated and non-regulated services and products in many jurisdictions.
A spokesman for the UK Financial Services Authority also said it is working with the company to understand the product and find out more about the rules that may apply and how they are marketed.
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