Binance Faces Regulatory Troubles in Lithuania for Offering Derivatives

Binance has received another regulator warning for its cryptocurrency Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term services, this time from the Central Bank of Lithuania. It has become one of the many regulators to flag Binance’s services.

Announced on Friday, the Lithuanian regulator warned that Binance is offering ‘unlicensed investment services’ in the country and ordered the company to ensure that its publicly available information is not misleading.

The warning came after the central bank assessed Binance’s operations in the country based on the publicly available information. According to the regulator, Binance is operating as a virtual currency exchange and is also offering custody services for virtual currencies.

“The Bank of Lithuania has also noted that crypto-asset related services are not regulated or supervised, thus consumers risk losing all their investments,” the Lithuanian regulator stated.

However, the primary concern of the Central Bank of Lithuania seems to be crypto derivatives trading services and stock tokens provided by Binance, rather than spot trading.

“The Bank of Lithuania notes that some online crypto-asset exchange platforms (even though they do not offer or advertise their services in Lithuania directly) enable their customers to invest in derivative financial instruments related to crypto-assets (futures and options), contracts for difference (CFD) or crypto-assets linked to securities,” the regulator added.

“Such services must be licensed.”

Binance vs Regulators

The latest warnings came only a day after Italy’s Consob warned that Binance is not authorized to provide derivatives and stock token trading services within its jurisdiction.

Earlier, the German regulator flagged Binance for its stock Tokenization Tokenization Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen Read this Term services and reportedly initiated a probe against the exchange for violating the local securities markets laws.

Meanwhile, other global regulators, including Japan’s FSA, UK’s FCA, and Poland’s UKNF, also issued a warning to Binance for its illegal operations in their individual jurisdictions. The Malta Financial Services Authority (MFSA), which in February 2020 clarified that Binance is not licensed by it, recently said that the exchange is not allowed to operate on the island.