Binance Removes 23 MLP Securities Four Days After Launch

Four days after opening its stock-trading platform to eligible users outside the United States, Binance removed 23 securities from the catalog on June 5, 2026, at 11:00 UTC. The cut covered Alliance Resource Partners (ARLP), Cheniere Energy Partners (CQP), Energy Transfer (ET), Enterprise Products Partners (EPD), Icahn Enterprises (IEP), and 18 others. None of them is a corporation. Every single one is a publicly traded limited partnership or master limited partnership, and each issues Schedule K-1 tax forms to its investors rather than the Form 1099-DIV that every conventional stock on the platform generates.

That shared legal structure almost certainly explains why all 23 came off at once. For a platform whose equities feature is restricted by design to non-US customers, the partnership K-1 structure creates a withholding and compliance burden that the exchange’s brokerage infrastructure may not be equipped to handle.

Twenty-Three Tickers, Four Days In

Binance published the removal notice on June 5, citing “most recent reviews” with no further explanation, language it applies routinely to crypto token delistings. The platform went live on June 1, 2026, offering eligible users access to more than 7,000 U.S.-listed stocks and exchange-traded funds (ETFs), with U.S.-based accounts excluded. Fractional shares were available from $5, and customers could fund positions with USDT, USDC, BNB, or other supported cryptocurrencies, with a minimum $0.35 platform fee per order and a 10 basis point fee on trades above $350.

Two regulated entities sit behind the feature. Nest Trading Limited, a broker-dealer authorized by Abu Dhabi Global Market’s (ADGM) Financial Services Regulatory Authority, routes and executes orders. New York-based Alpaca Securities LLC handles custody of the underlying shares, dividend payments, and corporate actions, as stated in Binance’s own disclaimer attached to the announcement.

The full list of removed partnerships:

Binance gave no additional detail on positions accumulated in the four days the platform was live, and made no mention of whether any users had acquired partnership units before the removal.

One Legal Structure, All Twenty-Three

Master limited partnerships (MLPs) and publicly traded partnerships (PTPs) trade on the New York Stock Exchange and Nasdaq in the same way ordinary stocks do, but the legal architecture beneath those familiar tickers works entirely differently. A unit of Enterprise Products Partners L.P. carries a NYSE ticker, updates in real time, and can be purchased fractionally through any brokerage interface.

A corporation pays income tax at the entity level and then distributes after-tax earnings to shareholders, who receive a Form 1099-DIV reporting those dividends. A publicly traded partnership pays no entity-level income tax at all. It passes income, deductions, gains, and losses directly through to each investor in proportion to their ownership stake, and each investor reports their allocated share via a Schedule K-1 filed with the IRS. Enterprise Products Partners L.P. makes this explicit on its investor relations FAQ page: because the company is a publicly traded limited partnership rather than a corporation, it issues K-1s to unitholders, not Form 1099s.

Qualifying for MLP status under U.S. tax law requires at least 90% of gross income to come from natural resources, energy, and related transportation or storage activities. That threshold covers the energy-sector core of the 23 removed names, including pipeline operators EPD, ET, MPLX, PAA, and WES; fuel and liquid-gas distributors GLP, CAPL, and SUN; propane supplier SPH; royalty trusts BSM and DMLP; coal producers ARLP and NRP; and gas compression provider USAC. Two names sit outside the energy sector entirely. AllianceBernstein Holding L.P. (AB) is an asset management firm, and Icahn Enterprises L.P. (IEP) is a diversified industrial holding company. Both are structured as publicly traded limited partnerships and issue K-1s, placing them in the same tax category as every pipeline in the group.

For a U.S. investor, that pass-through structure adds complexity: potential state-tax filings in every state where the MLP’s pipelines or assets operate, and income allocations that can diverge from actual cash distributions. A partnership can allocate taxable income to its unitholders without distributing the cash to cover that tax bill, a situation tax practitioners call phantom income. Foreign investors face a structurally different set of obligations.

The Tax Obligations That Fall on Foreign Partners

Under Section 1446 of the Internal Revenue Code (IRC), a partnership with income effectively connected to a U.S. trade or business must withhold federal income tax on that income and remit it to the IRS on behalf of each foreign partner. Binance’s equities product explicitly excludes U.S. users and runs through Nest Trading’s ADGM authorization; every Binance customer who held one of the 23 partnership units was, by the IRC’s definition, a foreign partner triggering partnership withholding requirements.

The key figures from the IRS’s current partnership withholding framework:

• 37% withholding rate on effectively connected income (ECI) allocable to non-corporate foreign partners, applied on distributions at the highest individual federal tax rate
• 10% withholding on the amount realized when a foreign partner sells or transfers a publicly traded partnership interest, under Section 1446(f) of the IRC
• A potential obligation for each foreign unitholder to file a U.S. federal tax return to reconcile their allocated share of ECI and reclaim any over-withheld amounts
• Possible multi-state income tax filings if the MLP’s operating assets span state lines, standard practice for large midstream networks

A foreign holder of an ordinary U.S. corporation’s shares faces a flat 30% withholding on dividends, often reduced under applicable tax treaties, and pays no U.S. capital gains tax on share sales provided they hold less than 5% of the company’s outstanding shares. The Form 1099-DIV reporting is managed entirely at the broker level with no additional filing obligations for the investor. Partnership income falls under a different regime: the 37% ECI rate can apply even when the partnership hasn’t distributed that income as cash, the annual allocation statement often arrives in late February or March requiring investors to file return extensions, and selling a partnership interest requires waiting for a final-year allocation before the ordinary-income and capital-gain portions of the exit can be precisely computed.

Nest Trading, Alpaca, and the Compliance Gap

Alpaca Securities LLC, which recently secured Nasdaq exchange membership and OCC clearing authorization, is engineered for conventional U.S. equity positions, processing dividends and corporate actions through a framework where a single IRS form covers each investor’s annual income reporting.

Partnership tax documentation sits in a structurally different category. The partnership itself, not the broker, generates the partner-level income allocation. Producing accurate allocations for foreign unitholders requires the MLP to determine each investor’s share of ECI, apply state apportionment formulas for every state where the partnership’s assets operate, and calculate the withholding owed. The broker carrying custody then distributes that withholding documentation across accounts in potentially dozens of countries, each with its own domestic reporting conventions and treaty relationships with the United States. For 23 separate partnerships with different operating territories, fiscal calendars, and allocation schedules, the coordination is an operationally distinct undertaking from standard custody.

The announcement named no specific limitation at Alpaca, no constraint within Nest Trading’s ADGM authorization, and no Binance-level compliance policy as the trigger. The stated reason was a periodic review. What that review produced was a list composed entirely of securities the IRS classifies as publicly traded partnerships subject to Section 1446 withholding.

Five Years from Shutdown to a Four-Day Review

Stock tokens first appeared on Binance in April 2021, beginning with Tesla before expanding to Coinbase, Microsoft, and Apple. Volume for the Tesla token reached nearly $10 million on its opening day. Germany’s Federal Financial Supervisory Authority (BaFin) issued a warning on April 28 of that year, stating that Binance had likely violated the European Prospectus Regulation by failing to publish investor prospectuses for the instruments. The United Kingdom’s Financial Conduct Authority (FCA) and Hong Kong’s Securities and Futures Commission (SFC) opened parallel inquiries into whether the tokens qualified as regulated securities. By July 2021, Binance shut the product down entirely.

After that shutdown, the company stayed out of equity markets for nearly five years. In January 2026, Binance signaled a return to the space. By February 2026, the exchange had partnered with Ondo Finance, a tokenized asset specialist, to list ten tokenized U.S. stock and ETF products on Binance Alpha, its internal token-discovery platform. The initial set included AAPLon, NVDAon, TSLAon, and GOOGLon. None were structured as partnership interests.

We have set out to reach the next 3 billion users, and to do that, we need to make it simpler for users to access opportunities across asset classes, diversify their portfolios, and move more easily between traditional investing and on-chain finance.

Yi He, Binance co-founder and co-chief executive, made that statement in the June 1 press release announcing the full equities launch. Four days later, the entire partnership category came off the platform.

What the Catalog Holds Now

The removal cuts one legal category, not the platform’s scale. The remaining securities are conventional corporations, generating dividend income reportable on Form 1099-DIV and capital gains subject to standard foreign investor withholding. A Binance customer in Singapore, Germany, or Brazil holding Apple, Amazon, or NVIDIA owes no ECI allocation, no U.S. partnership tax filing, and no state income tax return simply from holding the position.

The tokenization layer, described at launch as arriving “in the coming weeks,” will let users mint synthetic on-chain versions of their equity holdings, settled on BNB Chain. Binance has named no list of eligible securities for that product. The 23 partnership slots remain in the catalog structure as of June 5. They just don’t lead anywhere.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Securities trading involves significant market and liquidity risk. MLP and partnership tax rules are complex and vary by investor jurisdiction; consult a qualified tax or financial professional before making any investment decisions. Figures cited are accurate as of the publication date, June 5, 2026.