Crypto exchange Bitfinex is now venturing into TradFi with its latest launch of Bitfinex Securities.
The new trading platform, as the name suggests, will allow companies to directly list tokenized versions of their shares, bonds, and other funds to raise capital. Bitfinex users will have access to buy and sell these tokenized securities.
But similar ideas have been already implemented by crypto exchange giants such as Binance and FTX.
The difference is that, compared to stock tokens which feature public companies, Bitfinex Securities will list startups and private companies — allowing its users to gain exposure to private businesses.
Related Reading | Binance Launches Tradable Stock Tokens, Starting with Coinbase and Tesla
“We are basically trying to eat the lunch of [the] London Stock Exchange and other traditional stock exchanges,” said Bitfinex Securities CTO Paolo Ardoino.
Is Bitfinex Setting Itself Up for Regulatory Woes, Similar to Binance?
Despite the novelty, it’s hard to imagine an idea tangentially related to securities escaping the scrutiny of regulators around the world.
Binance, for one, launched stock tokens of popular publicly-traded companies such as Apple, Coinbase, Microsoft, Microstrategy, and Tesla.
Related Reading | Microsoft, Apple, Microstrategy Latest Stock Tokens to be Listed on Binance
In July, however, the global exchange was pressured by regulators to shut down its operations on stock tokens. Upon entering Binance’s stock token webpage, a message reads:
“Effective immediately, new stock tokens are unavailable for purchase on Binance.com, and Binance.com will no longer support any stock tokens after 14 October, 2021.”
It’s important to note, however, that Binance was already under intense scrutiny, with the U.S. Department of Justice and IRS launching a probe into the exchange’s operations in May.
There’s little to no doubt that Bitfinex was already aware of potential risks, as the exchange created a separate entity for its latest platform.
Bitfinex Securities is based in Astana, Kazakhstan, and regulated by the Astana International Financial Centre (AIFC) Authority.
Their conditional permit in Kazakhstan will drastically limit their services — with capital raises limited to a sum of $15 million and maximum number of investors set at 1,000.
Individuals based in the United States, Canada, Switzerland, and Italy are also unable to access Bitfinex Securities’ services.
Will these drastic measures elude the ever-prying eyes of regulatory bodies? Even so, the total addressable market seems largely limited at the moment.
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