Binance Hong Kong has made an announcement in which it has told suspension of its stock trading offered earlier to Hong Kong-based customers. The announcement has come as a result of the ongoing tussle between the Securities & Exchange Commission of Hong Kong and Binance over the ongoing dispute of stock trading wherein SEC has claimed that stock trading is the trading of “securities” and therefore a regulated activity.
There was a huge interest amongst Binance Hong Kong’s customers with regard to its stock-trading offer. However, the interest has been curtailed as the firm has been forced to suspend its stock-trading option for Hong Kong-based customers. It was announced by Binance Hong Kong that it had to immediately suspend its stock trading option. The firm apprised its customers that the decision was taken in the direction of the Securities & Exchange Commission of Hong Kong. The firm told that the suspension will take effect immediately after the announcement. However, the customers who have locked their stock trading will be given a cushion period of 90 days for disposing off their stocks.
Binance was offering stock trading options to Hong Kong-based customers for some time. However, an objection was raised by the Securities & Exchange Commission. The regulator was of the view that such type of trading falls within the category of “securities”. The regulator alleged that offering stock trading is therefore a “regulated activity” which comes directly under the authority. For anyone to carry out “regulated activity” one must seek permission from the regulator prior to presenting an offer. The regulator then issues a license to the company interested in offering stock trading services. However, in the case of Binance Hong Kong, there was no such permission obtained nor any license was issued to it.
Almost similar to the action of the Securities & Exchange Commission of Hong Kong, actions were also taken against Binance in multiple countries. For instance, on the basis of the same cause of action, inquiries have been initiated against Binance in the UK, Cayman Islands, Thailand, etc. In these countries as well, Binance has had to suspend its stock trading option.