Democratising value transfer is anything but seamless. Binance boss Changpeng Zhao makes it sound peachy but his foray into trading stock tokens has attracted the attentions of European regulators concerned whether it breaches securities rules.

Taken at face value, trading in these tokens — which track the movement of shares in Tesla, Coinbase and MicroStrategy — represents regulatory arbitrage.

Clashes were a long time coming. Tech moves at warp speed, regulators limp. In its short life Binance, founded by 44-year-old Zhao, has offered mining, trading in fractions of shares as well as issuing coins such as Venus. Along the way it has become one of the world’s biggest cryptocurrency exchanges.

With no official headquarters and trades in coins and tokens, Binance believes itself outside the remit of securities watchdogs and the concomitant need to issue lengthy new prospectuses. Many initial coin offerings have relied on little more than a single sheet of A4 and a handful of influencers championing their launch.

German watchdog BaFin, leading the regulatory charge, says Binance has probably violated securities rules over its launch of trading in stock tokens. The UK’s Financial Conduct Authority is also looking to get a better handle on applicable rules. These tokens walk and talk like securities although, unlike shares, they are not transferable to other customers. Traded as over the counter swaps, they are in some ways more akin to contracts for differences (CFDs). This does not mean they should escape scrutiny. The FCA has put restrictions on the sale of CFDs to retail customers.

Zhao is doing what any under-fire boss does: painting his company as a social good and supplementing its ranks with illustrious names and one-time politicians: former US senator Marcus Baucus and Brian Brooks, a former official at the Office of the Comptroller of the Currency. The latter is chief executive of its American affiliate, Binance.US.

As crypto exchanges and products grow in popularity, regulators are being forced into swift catch up. Levels of understanding fall far short. But the battle lines are being drawn. If you are a subscriber and would like to receive alerts when Lex articles are published, just click the button “Add to myFT”, which appears at the top of this page above the headline.