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After the harsh restrictions of 2022, Russian investors' access to the U.S. stock market through traditional brokerage accounts was virtually blocked. However, the most enterprising part of market participants quickly found an alternative workaround. This refers to tokenized stocks and crypto derivatives on foreign platforms. These instruments allow earning income from changes in the value of U.S. company securities, using cryptocurrency for settlements.

Currently, there is no consensus in the market on how widespread this practice is, what dangers it poses for Russian citizens, and how it aligns with upcoming legislative changes. As an analyst at Cryptalist, I conducted my own research and am ready to present you with an objective picture.

Scale of the Phenomenon: Niche Instrument or Mass Trend?

Expert opinions are divided. On one hand, Igor Plotnikov, Executive Director of Millpay, assesses the popularity of tokenized U.S. company stocks on platforms like Bybit, Binance, and Deribit as quite high among Russians. According to him, they are chosen by active traders and investors who have long worked with digital assets. The instrument's relevance is enhanced by the current market situation: a downturn in the crypto market against the backdrop of a strong revival in the stock market.

On the other hand, Alexander Nam, Vice President of Digital Assets at MTS Fintech, and Yaroslav Kabakov, Director of Strategy at IC Finam, assess the prevalence of the instrument much more cautiously. They call trading U.S. stocks via cryptocurrency the domain of a narrow circle of experienced players and an exclusively niche practice. There is no precise open statistical data, but indirect signs—lively discussions in specialized communities—indicate that this is one of the sought-after ways to invest in the U.S.

Legal and Sanction Risks: A Gray Zone

In assessing potential threats, analysts' positions largely coincide. Yaroslav Kabakov points to heightened legal, sanction, and infrastructure risks. The investor is entirely dependent on the rules of a specific foreign platform. Consequently, they may at any moment face asset freezes, lacking the usual protection of property rights.

Alexander Nam divides all client concerns into three categories:

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

Igor Plotnikov emphasizes the nature of this financial instrument. Any tokenized stock is a derivative that entirely depends on the exchange that issued it. If the platform runs into problems, the trader risks being left with nothing, as they have no rights to the actual securities. The legal status of transactions is in a gray zone due to the lack of clear regulation.

Fyodor Ivanov, Director of AML/KYT Analytics at operator SHARD, suggests dividing risks depending on the type of platform used. On centralized exchanges, difficulties are related to compliance, which has become too demanding for users with Russian passports. On decentralized platforms, the analyst sees no particular risks beyond the standard loss of funds due to high volatility. The main problem, according to him, arises when withdrawing funds into the Russian regulated framework: it is difficult to explain to a bank the origin of funds obtained from trading crypto derivatives.

Regulatory Prospects: Legalization or Prohibition?

Yaroslav Kabakov believes that Russian legislators will bet on licensed digital instruments within the national financial system. Operations through uncontrolled foreign crypto exchanges will not be supported. Alexander Nam specifies what legal products might look like. Most likely, investors will be offered digital financial assets (DFAs) on foreign securities, tokenized RWAs, and various structural solutions. In his opinion, their active development will eventually crowd out the gray market segment.

Igor Plotnikov views regulation from a different angle. For him, it is not about crowding out players, but a long-awaited clarification of the rules of the game. He explains that after the law on digital currency comes into force, citizens will be able to legally buy 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 purchasing assets there is legal. However, buying them directly on a foreign exchange with rubles will be prohibited. Though technically, this is already impossible, as foreign platforms do not accept rubles.

Conclusions from the Cryptalist Analyst

The main divergence among experts lies in assessing the scale of trading. Igor Plotnikov considers this method a popular investment approach among active traders from Russia. Alexander Nam and Yaroslav Kabakov classify it as a narrow niche for professionals. In describing risks, analysts are unanimous: a tokenized stock is merely a derivative without rights to the real asset, making the investor vulnerable to sanctions and freezes. Fyodor Ivanov also reminds of the problem of confirming the legality of income when returning it to Russia.

My expert opinion: Trading U.S. stocks through crypto derivatives is a high-risk but temporary workaround. It is only suitable for experienced participants prepared for a total loss of capital. With the development of regulation and the emergence of legal domestic DFAs on foreign assets, this gray segment will likely shrink, but will not disappear entirely, as demand for access to global markets will persist.