Crypto exchange FTX, in partnership with German financial firm CM Equity AG and Swiss-based Digital Assets AG, is offering what they call fractional stocks — about a dozen stock and crypto pairs that will be traded on FTX’s platform — according to a press release seen by Bloomberg. Other notable names include Facebook Inc., Netflix Inc., Tesla Inc. and the SPDR S&P 500 exchange-traded fund.
The move is part of a wider push in the cryptocurrency industry to popularize securitized token listings, digital assets that have been marketed for otherwise illiquid holdings such as real estate to art. Institutional interest in the crypto space has grown this year with Bitcoin almost tripling in value since March to hit the highest levels since January 2018.
Sam Bankman-Fried, CEO of FTX, said the tokens are targeted at investors who find it difficult or inconvenient to access stocks through traditional markets.
“For a lot of people it’s a hassle” to access stocks, he said in an interview. “There are ways to do it but they feel very much old and clunky. Giving people access broadens out what you can trade.”
The tokens will behave much like a depositary receipt or ETF, Bankman-Fried said. Investors can trade the tokens on FTX but will need to cash them out for the underlying security via CM Equity, which holds the actual securities, he said.
There are trading fees for the service but no other management fees for holding the tokens, a spokeswoman with FTX said. Registration begins Thursday and trading will go live shortly after. The U.S. and other restricted jurisdictions will not be allowed to trade the tokens.