After Binance shut down its stock token service without warning in July, customers of the cryptocurrency exchange in Europe can now transfer their tokenized stocks to another company.
Customers in the European Economic Area and Switzerland can now transfer tokenized stock from Binance to CM-Equity AG, a German investment business with which Binance collaborated to list the tokenized equities.
Customers from other countries, such as the UK, are unable to transfer tokens to CM-Equity AG. They have till October 14 to sell them on Binance. Binance will sell the tokens for clients if they do not sell them or shift them to CM-Equity AG’s platform by October 15.
Tokenized stocks are crypto-derivatives that track the value of stocks. In the instance of Binance, CM-Equity served as the broker, selling tokenized, fractionalized equities to Binance’s users.
Binance’s tokenized stocks, unlike ordinary stocks, did not pay dividends to users and did not allow them to vote as shareholders.
On April 12, two days before Coinbase was listed on the Nasdaq, Binance released tokenized stocks. On the day of the IPO, Binance listed Coinbase stock and also sold tokenized equities in Tesla, Apple, and Microsoft.
Binance abruptly stopped trading tokenized stocks in mid-July. Customers were unable to purchase new stock tokens, and Binance stated that the tokens would no longer be supported after October 14. On FTX and Bittrex, CM-Equity continues to provide comparable services.
Binance stated it discontinued the sale to focus on “other product offers,” but Hong Kong’s Securities and Futures Commission had warned consumers that Binance is not “licensed or registered” to provide tokenized stocks, which are “likely to be securities” under Hong Kong law, just hours before.
The day before, Italy’s financial regulator claimed Binance couldn’t function in the nation because of stock tokens. Germany’s financial authority claimed in April that they had “reasonable grounds” to believe the stock tokens broke securities regulations, while the UK’s financial regulator is looking into the problem.
