Some did not like Binance's action of launching stock tokens on April 12.
It is reported that the Financial Conduct Authority (FCA) of the United Kingdom (UK) is working with Binance to get confirmation on whether the share tokens offered are legal or otherwise.
The study aims to understand more clearly how such tokens are marketed under current law.
At the same time, the FCA emphasizes that Binance is responsible in ‘deciding’ whether their services and products are securities or not.
Binance’s effort to create a company share mirror token is a joint venture between CM-Equity AG and Digital Assets AG.
Both firms have stipulated the product does not require a prospectus, one of the items required if the token is a security under European law.
Digital Asset AG's head of corporate development, Brandon William, said that the share tokens issued did not give equal voting rights to equity holders. This means that these financial products can be likened to synthetic stocks.
He further explained: “We believe our tokenization method has more power and is easier to accept in the crypto community including TradFi (Traditional Finance). In the end, synthetics are just derivative products. ”
