Regulators in Lithuania and Hong Kong became the latest agencies to crack down on Binance on Friday, which further intensified the efforts of one of the world’s largest cryptocurrency exchanges to operate in major jurisdictions around the world.

The Central Bank of Lithuania stated that a Binance Payments subsidiary in Vilnius is providing “unlicensed investment services” in the country.The Hong Kong market regulator also issued a warning on the exchange’s stock token trading plan, which will be launched in early 2022. Face censorship In the UK and Germany.Binance says it will close its token plan “Commercial” reasons.

The latest condemnation for following a similar move From italy Thursday and from England Last month, it may further restrict Binance’s ability to interface with the traditional financial system.

Global financial regulators have expressed concerns about securities regulations and consumer protection issues.At the same time, Binance has been working hard to maintain its Compliance function People familiar with its operations say that it is on par with its rapid growth.

The warning issued by the UK Financial Conduct Authority in June, although limited in scope, proved to be the first in a series of major regulatory and private sector responses to one of the world’s largest crypto market participants.

It prompted the Main Street Bank Barclays with Santander Restrict its clients from sending funds to companies registered in the Cayman Islands.British payment group Clear Junction connected Binance to the main euro and pound remittance network and also cut off transactions this week.

The exchange said on Friday: “We take a collaborative approach when working with regulators, and we take our compliance obligations very seriously.”

Most of the group’s transactions are encrypted assets and complex derivatives related to them, but Binance relies on traditional and generally regulated companies to allow customers to put hard currency on the exchange.

Lithuania’s intervention may disrupt this connection with European payment entities. According to the exchange website, Binance UAB, an affiliate owned by CEO Changpeng Zhao, is the payment “agent” of the group.

The exchange told the Financial Times that Binance UAB “does not provide investment services, nor does it operate or control Binance.com.” However, the entity’s articles of association filed last year stated that its main activities include “investing in virtual assets” and “setting up a fund to invest in virtual assets”. The exchange’s terms of service also describe the company as the Binance “operator” — it defines it as the “party running Binance” — at least until July 5.

The organization stated that Lithuania’s warning “will not directly affect the services offered on Binance.com”.

Binance also established ties with Lithuania through Contis, which issued the group’s Visa-branded debit card. The card can be used throughout the European Economic Area, the group includes EU member states and other countries in the region.

Contis stated on its website that the EEA card is issued through an affiliate licensed by the Central Bank of Lithuania. Contis declined to comment on its relationship with Binance.

Also on Friday, Binance said it would shut down its stock platform, which allows users to buy and sell tokens that reflect the stock prices of companies such as Tesla and Apple. The announcement is about the same time as Hong Kong’s warning about the plan.

The British “Financial Times” first reported in April that European regulators are reviewing Binance’s stock tokens. German financial regulator BaFin stated that these tokens may violate securities rules. Binance told regulators that its views are based on A “misunderstanding” Product and called on BaFin to withdraw its notice. However, BaFin refused to comply.

Adam Samson’s contact information is [email protected] Or on Telegram @adamsamsonFT.


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