German regulator warns Binance over stock tokens


Germany’s financial regulator, BaFin, warned that Binance, one of the world’s largest cryptocurrency exchanges, risked being fined for offering security-tracking tokens without first publishing an investor prospectus.

On Monday, Binance announced it would offer tokens, denominated in the exchange’s own cryptocurrency, giving investors exposure to MicroStrategy Inc, Microsoft Corp and Apple Inc.

These joined tokens representing Tesla Inc and Coinbase Global Inc that were already trading.

But the regulator said on Wednesday there seemed to be no prospectus on the exchange’s website for the MicroStrategy, Tesla and Coinbase issues, a violation of European Union securities law that could result in Binance, as issuer, being fined 5 million euros ($6.04 million) or 3% of last year’s turnover.

It was unclear if prospectuses were available for the other traded tokens.

Binance had no immediate comment on the announcement.