The exchange adds the new listings to its existing Coinbase (COIN) and Tesla (TSLA) share tokens
Cryptocurrency exchange Binance today announced the listing of three new stock tokens, namely MicroStrategy (MSTR), which is listed today, Apple (AAPL), available from April 28, and Microsoft (MSFT), available from April 30. All three tokens are listed as trading pairs with BUSD.
Each share token represents a share with whose performance it closely follows. The underlying security is managed by CM-Equity AG (CM-E), a regulated asset management company from Germany. CM-E issues and sells the share tokens. Trading these tokens requires compliance with KYC regulations and is not available in mainland China, Turkey and the United States.
The new tokens can be traded during traditional trading hours and entitle their holders to economic returns on the underlying shares, such as potential dividends. However, they do not entitle to voting rights, and unlike conventional shares, share tokens can be purchased as sub-shares of listed companies.
These are not Binance’s first stock tokens. The exchange previously listed Tesla tokens (TSLA) on April 12, followed by Coinbase tokens (COIN) on April 15.
Changpeng Zhao, Managing Director of Binance, sagte at that time: “As a stock exchange, we will not miss out on either a good trading volume or the rooting of $COIN. Some exchanges refuse to list #bnb because they think it would help @binance. Your bad luck. You miss the coin and the ecosystem with the third largest market capitalization. We rate/list peer exchange coins like any other coin. When they are used, we write them down. Win-win.“
However, these listings have received unwanted attention from regulators. The Financial Times reported last week that European regulators will review the new share tokens for compliance with transparency rules and disclosure guidelines.
Under European regulations, Binance would be required to prepare a formal investment prospectus if the share tokens are considered securities. CM-E claims that this is not necessary because the stock tokens are settled in Binance’s own cryptocurrency, they cannot be transferred to other customers, and the same voting rights are not transferred.
Since Binance does not specify whether the stock tokens are securities or derivatives, they remain legally in a grey area. The UK Financial Markets Authority (FCA) is now working with Binance to define the product.