An in-depth article analyzes the 'US stock' products offered by crypto exchanges (CEX), revealing that they are not real stock ownership but tokenized spot, synthetic perpetual contracts, and traditional API routing. The tokenization model relies on Alpaca's clearing monopoly (94% market share) and a five-layer structure that strips voting rights, turns dividends into contractual promises, and lacks SIPC protection. DTCC's upcoming compliant tokenization service could reshape the industry.
Crypto exchanges offering 'US stock' trading products are not selling actual stock ownership. A new analysis breaks down three pathways: tokenized spot, synthetic perpetual contracts, and traditional API routing. The tokenization model depends on Alpaca's near-monopoly in clearing, controlling 94% of the market. A five-layer architectural pipeline dilutes investor rights: voting rights are voided, dividends become contractual payouts rather than actual distributions, and SIPC protection is absent entirely.
The article highlights that DTCC's planned compliant tokenization service could fundamentally alter the landscape, pushing the industry toward greater transparency and potentially ending the current equity-eroding practices.
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