Stock Token Trading: Binance To List MicroStrategy, Apple and Microsoft

Following the launch of tokenized stocks trading on its platform, major crypto exchange, Binance has disclosed plans to add three more stock tokens.

They include business intelligence firm MicroStrategy (MSTR) and tech firms Apple (AAPL) and Microsoft (MSFT). These new listings, when launched, would bring the tradable stock tokens on Binance to a total of five in number.

Binance Now Has Five Tradable Stock Tokens

The top exchange had announced the launch of Tesla and Coinbase stock tokens earlier this month.

Tesla tokens were launched first on April 12. The crypto exchange listed Coinbase a few days after.

The new tokens have separate timelines for listing. MicroStrategy tokens are scheduled to go live on April 26; Apple tokens will be made available on April 28. From April 30, the Microsoft tokens will be tradable to all users.

The tokens will only be tradable against Binance’s stablecoin BUSD.

As with the Tesla and Coinbase tokens, these new stock tokens are zero-commission digital tokens.

These tokens are fully backed by a depository portfolio of underlying securities held by a German company, CM-Equity AG, a BaFin-regulated investment firm that operates proprietary trading and brokerage services.

The holders of Binance stock tokens qualify for economic returns on the underlying shares, including potential dividends.

Tradeable tokens on Binance are not available to residents of mainland China, the United States, Turkey, and other jurisdictions restricted by CM-Equity.

For German traders, additional know-your-customer (KYC) measures would be required.

The entry of Binance into the equities market comes after fellow competitor FTX launched its fractionalized stock trading in October 2020. FTX had rolled out over 12 equity and cryptocurrency pairs on its platform including popular stocks like Tesla, Apple, and Amazon.

Foray Into Traditional Equities Brings Regulatory Trouble

Binance’s new stock token offerings look like it has landed the exchange in some regulatory trouble. Recent reports reveal that European regulators are looking into whether Binance has been following securities rules since its trading in stock tokens launched.

As Financial Times (FT) reported, the regulators are probing Binance to determine whether the tokens comply with rules governing transparency and corporate disclosures.

The same concerns apply to regulators in the United Kingdom.

UK’s financial watchdog The Financial Conduct Authority (FCA) said it was investigating the tradeable tokens and the regulations that may apply to it.

However, Binance has stated that its newly launched stock tokens are compliant products from a broker already regulated in the EU. According to Binance, the tradeable tokens are a CM-Equity product compliant with the EU’s Mifid II markets rules and BaFin’s banking regulations. Users can only buy and sell the tokens from and to CM-Equity AG, which does not require a prospectus.