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Binance crackdown continues as Hong Kong says it is unlicensed

Binance crackdown

TL;DR Breakdown

  • Binance crackdown continues as Hong Kong says it is unlicensed to operate in the city
  • Hong Kong came after Binance specifically because of its stock token product
  • Changpeng Zao plays down clampdown on Binance

In another Binance crackdown, Hong Kong SFC announced on Friday that the exchange is not licensed or authorized to offer any kind of services in the city.

This is despite the myriad of crackdowns Binance has faced over the past month. Hong Kong’s Securities and Futures Commission (SFC) compiled to the firm’s woes as it issued the notice to the number crypto exchange.

It marks Hong Kong as the eighth regulator to issue a warning against Binance for operating without the necessary license.

Other countries that has issued a warning against the exchange firm are Japan, Canada, Italy, Cayman Islands, Thailand, UK, and Singapore.

Italy’s top regulator CONSOB issued a similar warning to the exchange days back as Binance regulatory troubles continue to mount each day.

Binance crackdown has intensified over the past month and now threatens to curtail its rapid expansion. However, all the crackdown and compliance warnings are not new for the exchange as it operates in so many countries with very different sets of rules and regulations.

Why Binance crackdown by Hong Kong SFC?

Binance crackdown by Hong Kong is tied to the exchange not licensed to sell “stock tokens” in the city. However, the firm offers the product.

Binance’s stock tokens let users buy a fraction of publicly-traded companies’ shares without paying commission fees. Stocks on offer included Apple, Coinbase, Microsoft, MicroStrategy, and Tesla (CNBC).

The SFC said these were likely to be “securities” under Hong Kong rules, and so it may also be an offense to offer them to the Hong Kong public without its authorization.

“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.

Binance yet to make statement on clampdown

In the wake of a fresh crackdown on the exchange, the firm is yet to make any announcement or respond to a crackdown by Hong Kong.

However, when the UK’s FCA had issues with Binance, the exchange CEO played it down in a tweet calling it FUD (Fear, Uncertainty, and Doubt).

In an open letter, Zhao also played down the crackdown calling compliance a journey and largely assuring users Binance would comply with laws in the country it operates.

Muhaimin Olowoporoku

Muhaimin Olowoporoku

Muhaimin loves writing on crypto news aside from being a crypto enthusiast. He has a knack for analysing issues and updating people on what's happening around the globe. He believes that blockchain and cryptocurrency are the most useful systems of mutual trust ever devised.

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