July 16, 2021

HONG KONG (Reuters) – Hong Kong’s markets watchdog on Friday said Binance, one of the world’s largest cryptocurrency exchanges, was not licensed to sell ‘stock tokens’ in the city, products it said the exchange had offered in other markets.

Hong Kong’s Securities and Futures Commission (SFC) also said in its statement that “no entity in the Binance group is licensed or registered to conduct “regulated activity” in Hong Kong.”

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

Binance said earlier on Friday it would stop selling the products.

A Binance representative did not have an immediate comment on the SFC statement.

“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.

Binance was last month the world’s biggest exchange by spot trading volumes, data from UK researcher CryptoCompare showed, with trading volumes reaching $668 billion – a near ten-fold 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.

(Reporting by Alun John and Twinnie Siu; Editing by Peter Graff and Steve Orlofsky)