Tokenized stocks are blockchain-based tradable assets representing an investment in a stock. Recently, US SEC chairman, Jay Clayton stated that all stocks could become tokenized someday and that the innovation is welcome if anyone can show how this can be done efficiently. In October 2020, FTX, a Hong Kong crypto derivative exchange owned by FTX Trading Limited, a company incorporated in Antigua and Barbuda, partnered with CM-Equity AG to provide third party brokerage services for tokenized stock trading. “These products demonstrate a powerful future in which assets are digitized and traders have unlimited creative potential to express their beliefs about the markets”, said FTX CEO Sam Bankman-Fried. Simply put, you can now trade stocks on FTX with a third party brokerage by CM-Equity.
FTX lists tokenized stocks such as https://ftx.com/trade/TSLA/USD on the equities backed by shares of the stock in custody of CM-Equity. These tokenized stocks can be traded 24/7 on the FTX spot or futures market and can be redeemed with CM-Equity if desired. All corporate actions such as dividend rewards, stock split, significant spinoffs, etc would be effected on tokenized stocks by FTX. Dividends which are currently paid out gross of tax would be credited to users account by 2pm HKT.
CM-Equity, a regulated and licensed financial institution operating in Germany is the brokerage company offering third party services to FTX for tokenized stocks. In compliance to regulations, all FTX users may become CM-Equity clients and must pass through a compulsory level 2 KYC while all tokenized stock trading activities are monitored by CM-Equity for compliance. Also traders within FTX restricted jurisdictions are not allowed to trade tokenized stocks as IP addresses from these regions are restricted on the crypto derivatives exchange.
FTX is efficiently utilizing blockchain in finance and is poised to attract more traders/investors globally with this futuristic innovation.
If you are interested in registering on FTX, kindly use this link or email FTX support.
