Binance’s attempts to link traditional markets to the cryptocurrency area in the form of fractional share codes attracted the attention of the German financial regulator.

The Federal Financial Conduct Authority, also known as BaFin, warned on Wednesday that the world’s largest cryptocurrency exchange could face large fines for releasing security code codes without the accompanying investor notice.

Binance partially launched stock tokens for Apple, MicroStrategy and Microsoft on Monday, adding Coinbase and Tesla tokens, which were launched earlier this month. The exchange hired the German public company CM-Equity AG to hold its “custodian portfolio for underlying securities”, which Binance claims provides full financial support for tokens.

The regulator said that Binance’s failure to provide an investor prospectus for any of the tokens it issued is a breach of EU securities law and could result in a fine of € 5 million ($ 6 million).

“BaFin has reason to suspect that Binance Germany is selling shares in Germany in the form of ‘share symbols’ without giving the necessary distributions,” BaFin said.

“Remember that investments in securities should always be made only on the basis of necessary information,” the regulator added.

Binance told the Cointelegraph: “Binance takes compliance obligations very seriously and tries to comply with local regulatory requirements wherever we operate. We will work with regulators to resolve any issues they may have.”

Spokeswoman Jessica Young previously told Bloomberg that the stock exchange intends to comply with various regulatory requirements from the judiciary and will take steps to resolve the issue.

Source: CoinTelegraph

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