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The German securities regulator has rejected an appeal from cryptocurrency exchange Binance to remove its warnings about the firm’s stock tokens, which it argues could constitute a breach of German securities laws.

The Federal Financial Supervisory Authority, or BaFin, recently posted a notice to its website criticizing Binance for its stock tokens, which the regulator says should have been accompanied by a published prospectus after prior approval.

As part of enforcement action led by BaFin against the exchange, Binance has until this week to remove its tokens from sale in Germany, or face a fine. Under local laws, the maximum fine could run to $6 million, or 3% of annual revenue. The regulator could also hold Binance liable for any losses incurred by investors in its stock tokens.

According to the Financial Times reports, Binance is currently lobbying the regulator to change its mind, arguing that BaFin has fundamentally misunderstood the nature of its offering, which would render the warnings inappropriate.

However, for now at least, the regulator appears to be holding fast, suggesting that the failure to publish investment prospectus documents constitutes “a criminal offense.”

According to Binance, the stock tokens are not securities in their own right because they are not transferable to other exchanges or customers, and they are transacted through a third party.

But for BaFin, even the tokens being available to trade on the exchange was “itself…sufficient to make the tokens represent a security or a financial investment product.”

While refusing to comment on the specifics of the case, Binance said it remains “committed to following local regulator requirements wherever we operate.”

The developments mark the latest tussle between Binance and securities regulators over the tokens, with the U.K.’s Financial Conduct Authority amongst those expected to pursue similar action against the firm.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

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