SFC warns against Binance trading

The watchdog said no entity under the Binance Group is licenced in Hong Kong.

The Securities and Futures Commission (SFC) has issued a warning that no entity under the Binance Group is licenced or registered to conduct a regulated activity in Hong Kong.

This comes amidst reports that Binance has offered trading services in-stock tokens in various jurisdictions, which may include Hong Kong. The SFC noted Binance operates at this website: https://www.binance.com/zh-HK.

“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,” SFC Executive Director of Enforcement Thomas Atkinson said in a statement.

“Investors should be wary of the risks of trading virtual assets on an unregulated platform. If the platform ceases operation, collapses, or is hacked, investors may face the possible risk of losing their entire investments held on the platform.”

The SFC explained stock tokens are virtual assets represented to be backed by different depository portfolios of underlying overseas-listed stocks with their prices closely tracking the performance of the respective stocks.

It is being promoted as alternative means for investors to purchase fractional shares instead of fully paid-up shares.

The SFC warns that where the Stock Tokens are “securities,” marketing, or distributing such tokens, whether in Hong Kong or targeting Hong Kong investors, constitute a “regulated activity” and require a licence from the SFC unless an applicable exemption applies.

It may also be an offence for any person to offer such tokens to the Hong Kong public without the SFC’s authorisation or registration. Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions.