- Binance is exploring a return to tokenized stock trading after shutting its 2021 Tesla/Apple-style tokens amid European regulatory pressure and securities-law scrutiny.
- Coinbase is seeking SEC no-action or exemptive relief to offer blockchain-based tokenized equities with 24/7 trading, fractional ownership, and faster settlement.
- The NYSE’s owner ICE is developing a 24/7 tokenized securities platform using stablecoins and instant settlement, pending regulatory approval.
- Whether these products can scale hinges on securities classification, broker-dealer requirements, disclosure/liability rules, and evolving U.S. crypto market-structure legislation.
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Binance’s earlier foray into tokenized stocks in 2021 offered fractional, blockchain-backed tokens representing shares like Tesla and Apple. Regulators in Germany (BaFin) and the UK (FCA) flagged the product for failing to meet prospectus requirements and violated securities regulation, leading to its shutdown in mid-2021. The proposed revival would need to avoid those pitfalls and align with stricter oversight.
Coinbase is arguably the earliest mover in the U.S. among exchanges seeking to re-enter this space. In June 2025, the company publicly disclosed its application to the SEC for classified approval of tokenized equities—that could be enabled through a no-action letter or exemptive relief. That regulatory status would protect its operations from certain enforcement actions and clarify legal exposure. Key features anticipated include 24/7 trading, fractional shares, and cost reductions from eliminating traditional intermediaries.
Simultaneously, the New York Stock Exchange, via its parent ICE, has announced plans to build an entirely new platform for tokenized securities. This platform would offer continuous trading, stablecoin funding, instant settlement, and maintain shareholder rights. The platform is intended to operate alongside or as a complement to the traditional U.S. equity markets—but its launch depends entirely on regulatory approvals.
On the regulatory front, the U.S. legislative landscape is in flux. The Senate’s crypto market structure draft bill—along with the Responsible Financial Innovation Act and related legislation—contains provisions that could either safeguard or severely limit tokenized equity offerings. One proposed clause would forbid treating tokenized securities like commodities; another would impose excessive compliance burdens; others address broker-dealer status and SEC vs. CFTC jurisdictions. Coinbase has already publicly opposed bill drafts that it believes would restrict tokenized equities or impose unfriendly regulations.
Internationally, the precedent set by BaFin’s enforcement and warnings about Binance’s stock tokens illustrates how strict securities regulations remain outside the U.S. Missteps in labeling, customer protection, prospectus requirements, and derivative vs. ownership distinctions remain central legal risk vectors.
Strategic implications for all market players are significant: firms that successfully navigate regulation could capture first-mover advantages in tokenized securities, reimagine market hours and liquidity, and build new business lines. But misexecution—in oversight, compliance, or legal structure—could lead to costly enforcement, reputational damage, or outright bans.
Key open questions include:
• Will the final U.S. market-structure legislation support or restrict tokenized equity platforms?
• How will broker-dealer registration and securities laws adapt to novel tokenization models?
• What consumer protection and disclosure standards will tokenized equity products require to satisfy regulators globally?
• How will these innovations interact with stablecoin regulation, especially as some platforms intend stablecoin-backed deposits or settlement?
Supporting Notes
- Binance’s original 2021 stock token service included tokens tied to Tesla, Microsoft, Apple, and Coinbase, but was shut down following scrutiny from the FCA and BaFin over securities-law compliance and prospectus requirements.
- Binance claims its recent support for tokenized real-world assets and TradFi perpetual contracts settled in stablecoins precede its renewed interest in tokenized equities.
- Coinbase’s CLO, Paul Grewal, stated that offering tokenized equities is a “huge priority” and that the company is seeking a no-action letter or exemptive relief from the SEC to legalize tokenized stock trading in the U.S..
- Nasdaq and the NYSE both are pursuing regulatory approvals to enable tokenized stock/ETF products and platforms that would allow continuous (24/7) trading and blockchain-based settlement.
- The Senate’s draft market structure bill includes provisions that would explicitly disallow tokenized securities being treated as commodities and could impose new regulatory requirements, leading Coinbase to publicly withdraw support from draft versions it deems restrictive.
- BaFin warned Binance that its stock token product may have violated EU securities rules by not issuing a prospectus, with fines of up to €5 million or 3% of annual revenue possible; Binance defends the product as an over-the-counter swap via German broker CM-Equity compliant with MiFID II.