World’s leading cryptocurrency exchange Binance, may be fined heavily as a result of its failure to publish an investor prospectus for its newly launched stock tokens.
Binance recently launched a few stock tokens which including Tesla and Coinbase stock. While this recent development has attracted praise from a lot of individuals, German financial regulator, BaFin has raised concerns.
BaFin is a financial supervisory authority in Germany. BaFin has criticized Binance decision to list security-tracking tokens without an investor prospectus. The financial regulator said that the failure of the exchange to keep investors informed about the share offer in the stocks listed on the platform is a breach of the European Union securities law.
In addition to the complaint, the agency reminded the public that security investments should only be done with adequate information.
This carelessness on the part of the exchange could result in a huge fine. At the moment, the expected fine Binance could pay is about $6 million. At the moment, stock tokens available on the platform include those of Apple, MicroStrategy, Microsoft, Coinbase and Tesla. The exchange has plans to broaden its stock portfolio range in the future.
Binance employed CM-Equity to hold its depository portfolio of underlying securities. The leading crypto exchange claims that this provides full financial backing for the tokens.