Former FTX Europe Head Targets Tokenized US Stock Trading With New SEC Exemption

Perpetuals.com, Listed on Nasdaq, Is the Second Firm After the OKX and NYSE Parent ICE Joint Investment to Pursue the US Tokenized Stock Market Under the SEC's New Framework

A Nasdaq-listed fintech company led by a former FTX Europe executive is planning to put tokenized US equity trading on the blockchain rails under the Securities and Exchange Commission's (SEC) new regulatory framework.

(PDC), led by CEO Patrick Gruen, announced on Wednesday that it plans to launch a tokenized securities exchange under the SEC's five-year exemption, which allows certain markets to trade U.S. stocks on public blockchains without registering as a traditional stock exchange.

The move makes it the second company to pursue a market under the exemption, following OKXICE, a joint venture between cryptocurrency exchange OKX and New York Stock Exchange (NYSE) parent Intercontinental Exchange (ICE), which last week unveiled plans for intraday trading of more than 60 U.S. tokenized stocks.

The exemption, introduced in September, allows certain markets to trade US stocks on public blockchains without registering as a traditional stock exchange. It requires tokens to have the same equity rights as ordinary shares, including dividends and voting rights, while giving companies 30 days to object to trading their shares in the tokenized securities.

The move marks a return to tokenized stocks for Gruen and his team, who helped develop some of the first equity-linked tokens offered by cryptocurrency exchanges including Binance and FTX in 2021.

Groen is a co-founder of Digital Assets AG, a Switzerland-based tokenization company that partnered with German investment firm CM-Equity to bring digital tokens linked to stocks like Tesla and Coinbase to cryptocurrency traders. Digital Assets AG was later acquired by FTX Group and became part of FTX Europe, which Groen led before the cryptocurrency exchange group collapsed in November 2022.

Those early products were different from the securities envisioned under the new SEC framework. While they provide exposure to the underlying stock price, Binance Equity Tokens do not provide voting rights. Binance went public in July 2021 amid regulatory scrutiny, including concerns raised by German regulator BaFin over its failure to publish a prospectus.

"The Perpetuals team has long been a pioneer in tokenization, and this expansion into the US allows us to further leverage our platform and deep expertise," Gruhn said in a statement.

The company currently provides trading technology for Perpetual Markets MTF, a Cyprus-based marketplace licensed under Europe's MiFID II framework, which was also licensed under the EU's Crypto Asset Markets Regulation in August.

The company reported $65.2 million in total assets at the end of April, while posting a net loss of $17.6 million during its fiscal year.

It also announced earlier this year an agreement with Datavault AI to support the trading infrastructure for its planned tokenized commodity offering, including copper, gold and other physical assets, for more than $300 million.

According to a public announcement shared with CoinDesk, the US Perpetuals market is operated by Kephas Corporation, a Delaware-based subsidiary. Trading is done through authorized automated market maker (AMM) liquidity pools, initially on Kronos X Public, an Ethereum-compatible layer 2 blockchain developed by the company.

AMMs use smart contracts and liquidity pools to facilitate transactions between buyers and sellers instead of traditional exchange order books. Each pool pairs a tokenized US share with a digital asset, initially expected to be a form of USDC USDC $1.0001, and allows eligible investors to trade the shares against the USD stablecoin issued by Circle.

Perpetuals has yet to set an exact release date. A company spokesperson told CoinDesk that depending on the completion of market information and compliance arrangements, smart contract security reviews and other preparations, trading could begin in mid-November after the required 30-day period following the public announcement.

The company spokesperson added: The company also plans to publish updated information, including live smart contract addresses, before trading begins.

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