It was only in April that Binance began to offer trading in popular stocks such as Tesla, Apple and Microsoft as tokens. This will end again from mid-October.
In spring 2021, Binance was still convinced that it would attractively expand its portfolio by trading tokenized stocks. It all started with the securities of Tesla, followed later by Apple, Microsoft, MicroStrategy and Coinbase. Now Binance customers who have taken advantage of this offer have to take action. Because on October 14th, the trading platform for tokenized shares at Binance will be closed. Acquisitions are already no longer possible, it says in a message. Open positions should be closed individually by October 14th, otherwise Binance will settle itself on October 15th according to the then current market prices.
According to Binance, the decision was made against the continuation of so-called stock tokens as part of the continuously checked range of products. But in Germany the Federal Agency for
Financial Services Authority (BaFin) published a warning at the end of April and warned that Binance’s offer violated the prospectus requirement for securities. This, too, is likely to have influenced Binance’s move because the crypto exchange has been trying for weeks to proactively avoid possible conflicts with regulatory authorities. In purely economic terms, trading in stock tokens at Binance had remained a niche business, with sales rarely reaching the million mark per day.
One detail remains interesting: Binance cooperated with CM Equity AG from Munich and Digital Assets AG from Switzerland for the tokenized shares. CM Equity AG now wants to organize a trading platform for stock tokens on its own and will probably make it possible at the beginning of October to transfer portfolios from Binance there, it is said. Interestingly enough, CM Equity AG also works with the FTX crypto exchange, where stock tokens have so far been on offer. It remains to be seen whether FTX will also discontinue trading in shares shown as tokens for German and EU customers.
Conclusion: Share trading 2.0 – a market with a prospect
In the USA, the fintech company Robinhood has had great success with share trading via app, in the EU, for example, eToro and Revolut are known for such offers. With low fees and the option of buying and selling hundredths of a share, the providers open up new customer groups. It is to be expected that service providers such as CM Equity AG will continue to work on placing stock tokens in accordance with the law. Only Binance is out of stock trading 2.0 for the moment, but could try again at a later date.
If you don’t have a Binance account yet, you can set up one here and save 10% fees, you can find out everything you need to know here.