Crypto news

After the introduction of strict restrictions in 2022, Russian investors' access to traditional brokerage accounts for trading U.S. stocks was virtually cut off. However, the most enterprising market participants quickly found an alternative path — tokenized stocks and crypto derivatives on foreign platforms. This instrument allows earning income from fluctuations in the value of American giants' securities, using cryptocurrency for settlements. But how safe is this workaround for Russian citizens, and how does it align with upcoming legislative changes?

Reality of the Scale: A Niche Instrument or a Mass Phenomenon?

Expert estimates on the popularity of this method vary. On one hand, Igor Plotnikov, Executive Director of Millpay, notes high demand for tokenized stocks on platforms such as Bybit, Binance, and Deribit, especially among active traders and those already experienced with digital assets. The current market environment — a downturn in the crypto market against the backdrop of a strong stock market revival — only fuels interest in this instrument.

On the other hand, Alexander Nam, Vice President of Digital Assets at MTS Fintech, and Yaroslav Kabakov, Director of Strategy at IC Finam, offer a more cautious assessment. They characterize this practice as the domain of a narrow circle of experienced players, rather than a widespread trend. In their view, this is exclusively a niche story for professionals already familiar with the mechanics of the crypto market.

Triple Threat: Legal, Sanctions, and Infrastructure Risks

Despite disagreements on the scale, experts are unanimous in describing the potential threats. Yaroslav Kabakov emphasizes heightened legal, sanctions, and infrastructure risks. The investor is entirely dependent on the rules of a specific foreign platform and may face asset freezes at any moment, left without the usual protection of property rights.

Alexander Nam categorizes the risks into three groups:

• Legal: complete uncertainty regarding the legal status of transactions and complex tax accounting.
• Sanctions: high probability of account blocking due to Russian citizenship.
• Infrastructure: a tokenized instrument never guarantees legal rights to ownership of the underlying asset.

Igor Plotnikov adds that any tokenized stock is a derivative fully dependent on the exchange that issued it. If the platform encounters problems, the trader risks losing everything, as they hold no rights to the actual securities. The legal status of transactions remains in a "gray zone" due to the lack of clear regulation.

Fyodor Ivanov, Director of AML/KYT Analytics at operator SHARD, highlights the main problem when repatriating funds to the Russian system: the difficulty lies not so much in explaining the source of funds to the bank, but in ensuring that a bank working with cryptocurrency understands and accepts those explanations.

Looking Ahead: What Will Regulation Bring?

Expert opinions on the future diverge. Yaroslav Kabakov believes that Russian legislators will focus on licensed digital instruments within the national financial system. Operations through uncontrolled foreign crypto exchanges will not be supported. Alexander Nam specifies: investors will likely be offered digital financial assets (DFAs) on foreign securities, tokenized RWAs, and various structural solutions. In his view, their active development will eventually push out the "gray" market segment.

Igor Plotnikov views regulation from a different angle. For him, it is not about pushing players out, but about long-awaited clarification of the rules of the game. He explains that after the digital currency law comes into force, citizens will be able to legally purchase tokenized assets with cryptocurrency. Restrictions will only affect the use of Russian payment infrastructure. That is, buying USDT for rubles on a domestic licensed platform, transferring them abroad, and acquiring assets there is legal. However, buying them directly on a foreign exchange with rubles will be prohibited, although technically this is already impossible.

My analysis: The situation resembles a game of cat and mouse between regulators and the market. Until clear rules are established, crypto derivatives remain an attractive but risky instrument. However, with the adoption of the digital currency law, the "gray zone" will begin to shrink, and risky workarounds will be replaced by more transparent, though likely less flexible, domestic solutions. Investors should prepare for this transition now, assessing their risk tolerance and long-term goals.