{"id":123473,"date":"2021-05-03T03:58:31","date_gmt":"2021-05-03T03:58:31","guid":{"rendered":"https:\/\/precoinnews.com\/?p=123473"},"modified":"2021-05-03T03:58:31","modified_gmt":"2021-05-03T03:58:31","slug":"german-financial-regulator-suspects-binance-offering-violates-securities-laws","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/crypto\/german-financial-regulator-suspects-binance-offering-violates-securities-laws\/","title":{"rendered":"German financial regulator suspects Binance offering \u2018violates securities laws\u2019"},"content":{"rendered":"
The German financial regulator has said it has reasonable grounds to suspect cryptocurrency exchange Binance of violating securities laws over its tokenized stock trading service.<\/p>\n
In a notice published by the Federal Financial Supervisory Authority, or BaFin, the regulator said it believed the Binance had offered \u201csecurities in the form of ‘shares token’ with the terms TSLA\/BUSD, COIN\/BUSD and MSTR\/BUSD without the required prospectuses on the website.\u201d<\/p>\n
If upheld, this would constitute a breach of Germany\u2019s securities laws, which among other things requires a prospectus to be published ahead of any securities offer.<\/p>\n
“The public offering of securities without an approved prospectus constitutes – unless an exception applies – a violation of the prospectus obligation under Article 3 Paragraph 1 of the EU Prospectus Regulation. Contrary to Article 3 Paragraph 1 of the EU Prospectus Regulation, no prospectuses have been published for the public offers of Binance Deutschland GmbH & Co. KG. There are no indications of an exception to the prospectus requirement.”<\/p>\n
While the regulator stopped short of setting out its plans for enforcement, the notice goes on to highlight the penalties for violations of the rules around prospectuses.<\/p>\n
\u201cA violation of the prospectus obligation constitutes an administrative offense according to \u00a7 24 Paragraph 3 No. 1 WpPG and can be punished with a fine of up to 5 million euros or 3 percent of the total turnover of the last financial year according to \u00a7 24 Paragraph 6 WpPG. Fines of up to twice the economic benefit derived from the violation can also be imposed.\u201d<\/p>\n
The news will come as the latest blow to Binance\u2019s plans, which have attracted scrutiny from regulators throughout the European Union.<\/p>\n
It remains to be seen whether BaFin will now proceed with enforcement action over the matter.<\/p>\n
Follow <\/em>CoinGeek\u2019s Crypto Crime Cartel<\/em> series, which delves into the stream of groups\u2014from <\/em>BitMEX<\/em> to <\/em>Binance<\/em>, <\/em>Bitcoin.com<\/em>, <\/em>Blockstream<\/em>, ShapeShift<\/em>, Coinbase<\/em>, <\/em>Ripple<\/em> and <\/em>Ethereum<\/em>\u2014who have co-opted the digital asset revolution and turned the industry into a minefield for na\u00efve (and even experienced) players in the market.<\/em><\/p>\n