Lithuania and Hong Kong Warn Against Binance

The central banks of Lithuania and Hong Kong have both issued warning statements against Binance.

The Bank of Lithuania warned Binance about its unlicensed investment services provided in Lithuania. It ordered the company to ensure that its publicly available information was not misleading. Meanwhile, Hong Kong is more concerned about Binance’s stock token offerings.

Bank of Lithuania’s warning

To preface the warning in its announcement, the Bank of Lithuania noted that crypto-asset related services are not regulated or supervised. Having assessed publicly available information, it assessed Binance as a virtual currency exchange operator and a virtual currency wallet operator. 

However, it warned the company that some of its ​​investment services are unlicensed. For instance, Binance enables their customers to invest in derivative financial instruments related to crypto-assets. According to Lithuanian law, these means are considered financial instruments, for which services must be licensed. The authority said it would monitor for any unlicensed activities in the country and would cease provision of such services if found.

Hong Kong’s issue with stock tokens

Meanwhile, the Securities and Futures Commission (SFC) in Hong Kong said it was concerned that the stock tokens Binance was offering would be available to its investors. The SFC recalled that no entity in the Binance group is licensed or registered to conduct “regulated activity” in Hong Kong.

According to authorities, stock tokens are likely to be considered “securities” under the Securities and Futures Ordinance (SFO). If found so, they are subject to the regulatory remit of the SFC. The SFC also warned that where stock tokens are considered “securities,” they also require proper licensing.

Latest Binance issues

It turns out that the SFC won’t have to concern itself with any stock token regulation for the time being. Earlier today, Binance announced that it would cease selling stock tokens. The crypto exchange added that they would continue to service them until October. At that point, any customers continuing to hold stock tokens will be closed out of their positions.

This news comes on the heels of regulators announcing that they will bar Binance from operating in Italy. This in turn came after the UK’s own financial watchdog shutting the door on Binance’s activities within its country.