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Hong Kong and Lithuanian regulators hit out at Binance

By Aaron Woolner

03:06, 19 July 2021

Binance app on smartphone

Lithuania’s central bank and Hong Kong’s securities regulator were the latest financial supervisors to say that digital exchange Binance is offering services in their jurisdictions without a licence. 

On Friday, Hong Kong’s Securities and Exchange Commission put out a “warning statement” about Binance offering stock tokens – virtual assets supposedly backed by listed stocks – in the city. 

“The Securities and Futures Commission (SFC) is aware that Binance has offered trading services in stock tokens (Stock Tokens) in a number of jurisdictions and is concerned that these services may also be offered to Hong Kong investors. The SFC wishes to make it clear that no entity in the Binance group is licensed or registered to conduct ‘regulated activity’ in Hong Kong,” the statement read.

“Criminal sanctions”

On Saturday, The Bank of Lithuania (BOL) put out a statement saying that it had warned Binance over its provision of unlicensed investment services in the EU member state. It added that crypto-asset related services are not regulated or supervised in the country and therefore consumers risk losing all their investments.

In contrast to the BOL’s warning and request that Binance ensures its public statements are not misleading, the SEC took a harsh stand and said that stock tokens are securities which required a licence to market in Hong Kong, and conducting such business without official approval is a criminal offence. 

XRP/USD

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+16.750% 1D Chg, %
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Short position overnight fee 0.0137%
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BTC/USD

88,404.20 Price
+0.560% 1D Chg, %
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Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

ETH/USD

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-1.890% 1D Chg, %
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Overnight fee time 22:00 (UTC)
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US100

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-0.280% 1D Chg, %
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Short position overnight fee 0.0026%
Overnight fee time 22:00 (UTC)
Spread 1.8

“Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions,” said the SEC’s statement. 

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Troubles across borders  

Thailand’s Securities and Exchange Commission also recently raised the spectre of criminal proceedings against Binance. On 2 July the regulator said that it filed a complaint with the Economic Crime Suppression Division of the Royal Thai Police against Binance for conducting business in the Kingdom without a licence.  

Regulators in the UK, Japan and the Cayman Islands have all recently warned that Binance was operating in their jurisdictions without a licence, and the EU payments network has suspended deposits to the digital exchange. 

Binance is the largest bitcoin exchange globally by volume, according to data from CryptoCompare. 

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Read more: Crypto derivatives volumes outstrip spot trades in June

 

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