Binance, the world's largest crypto exchange, has with immediate effect suspended the trading of stock tokens, a relatively new offering.
In a press release issued on Friday, the crypto exchange stated that “effective immediately,” purchase of stock tokens on its trading platform was halted.
Existing holders of these assets will have about 3 months to unwind their positions.
The exchange was earlier offering tokenized stocks of global blue-chip brands that include Apple, Tesla, Microsoft Corp, and Tesla Inc.
Stock tokens are simply digital-based derivatives of equities built on existing blockchains and pegged to the value of the relevant share. They are usually bought and sold in fractional units, unlike traditional Stocks.
Global scrutiny of the crypto market has been on the surge amid worries over lax consumer protection and the use of crypto assets for money laundering, with global financial watchdogs zeroing in on crypto exchanges.
Mounting regulatory pressures has negatively disrupted the business operation of the world's biggest crypto trading exchange amid valid reports that European financial watchdogs investigated Binance’s offering of stock tokens.
In June, The Financial Conduct Authority had already instructed Binance to suspend all regulated activity in the United Kingdom.
That same period, Japan’s Financial Services Agency slammed the Cayman Islands's incorporated exchange for operating in the world's third-largest economy without valid registration, as regulatory clampdown against digital exchanges in Ontario, Canada's economic hub prompted Binance to cease all its operations there.
In addition, Italy's financial regulator recently disclosed that the crypto exchange was not authorized to investment services in the Western European Country.