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  • FTX has launched its new product offering tokenized stocks and futures tokenized stocks. 
  • Anyone that has passed the KYC level 2 can access the new service and access 12 different stocks.

FTX has just launched its new service offering tokenized stocks fully regulated in Germany by CM-Equity, a licensed financial institution. The first 12 products include Tesla, Apple, Amazon, Facebook, Netflix, Google, SPY, Bili, Alibaba, BYND stocks, and two popular companies that have announced a potential Coronavirus vaccine with a 90% success rate, BioNTech, and Pfizer. 

Spot tokens are fully backed by shares of the same stock by CM-Equity and can be redeemed for the underlying shares if needed. Users need to pass the KYC level 2 at FTX and CM-Equity’s own KYC and compliance. Customers from banned jurisdictions like the United States and others are not allowed to participate. 

How do tokenized stocks work on FTX?

Tokenized stocks are available to trade 24/7; however, liquidity can greatly vary depending on the time of the day or week. Tokenized stocks can also be used as collateral for futures trading on FTX with a ‘collateral weight of 0.85’.

Futures on tokenized stocks will work the same as other futures on FTX. Additionally, users are entitled to dividends by holding the stocks on FTX. So far, the exchange has stated that dividends will be ‘paid out gross of tax’, and each user will have to understand the tax consequences of it. The official announcement comes with a warning:

Note that stocks can be highly volatile and illiquid, especially when their primary listing exchange is closed.  Please exercise your judgement and caution when trading futures on tokenized stocks.  Any risk that you take in your trades is your responsibility to manage.  You might be liquidated if futures prices change.