HK watchdog says Binance not licensed to conduct any regulated activity in the city

FILE PHOTO: The logo of Binance is seen on their exhibition stand at the Delta Summit, Malta's official Blockchain and Digital Innovation event promoting cryptocurrency, in St Julian's, Malta October 4, 2018. REUTERS/Darrin Zammit Lupi

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.

“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.

Hong Kong plans to bring in legislation requiring all cryptocurrency exchanges in the city to be licensed and only to offer services to professional investors. At present, exchanges can apply to be licensed by the SFC, but are not required to.

A Binance spokesperson said it does not currently hold exchange operations in Hong Kong.

“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion,” the spokesperson added.

In a separate statement on Friday, Binance said it would stop selling stock tokens.

Binance last month was the world’s biggest exchange by spot trading volumes, data from UK researcher CryptoCompare showed, with trading volumes reaching $668 billion — a near 10-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.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.