Crypto news

After the strict restrictions of 2022, Russian investors' access to the U.S. stock market through traditional brokerage accounts became virtually blocked. However, the enterprising part of market participants quickly found an alternative workaround. This refers to tokenized stocks and crypto derivatives on foreign platforms. They allow investors to profit from changes in the value of U.S. company securities, using cryptocurrency for settlements. There is no consensus on how widespread this practice is, what dangers it poses for Russian citizens, and how it aligns with upcoming legislative changes.

At first glance, the instrument looks attractive. Traders get the opportunity to trade with high leverage, deposit and withdraw funds in USDT stablecoins around the clock, and, most importantly, bypass the need to open an account with a foreign broker. The derivatives themselves are created based on securities of the most popular tech giants, and amid the rapid rise in oil and gold prices, platforms have begun actively offering instruments on commodities as well.

Scale of the Phenomenon: From Mass Enthusiasm to a Narrow Niche

Expert estimates on the scale of this phenomenon diverged. Igor Plotnikov, Executive Director of Millpay, believes that tokenized shares of U.S. companies on platforms like Bybit, Binance, and Deribit are quite popular among Russians. They are most often chosen by active traders and those investors who have long worked with digital assets. The current market situation adds relevance to the instrument: there is now a downturn in the crypto market against the backdrop of a strong revival in the stock market.

Although there is no precise open statistical data, Igor Plotnikov suggests relying on indirect information. Heated discussions in specialized communities and high traffic on exchanges prove that this is one of the most sought-after ways to invest in the U.S.

However, other speakers assess the prevalence of the instrument much more cautiously. Alexander Nam, Vice President of Digital Assets at MTS Fintech, calls trading U.S. stocks via cryptocurrency the domain of a narrow circle of experienced players. This view is shared by Yaroslav Kabakov, Director of Strategy at IC Finam, who considers such a practice exclusively niche.

Legal and Sanction Risks: Complete Dependence on the Platform

In assessing potential threats, the experts' positions largely coincide. Yaroslav Kabakov points to increased legal, sanction, and infrastructure risks. In this case, the investor is completely dependent on the rules of a specific foreign platform. Consequently, they may face asset freezes at any moment, left without the usual protection of property rights.

Alexander Nam divides all client concerns into three categories:

• Legal dangers: related to the complete uncertainty of the legal status of operations and complex tax accounting.
• Sanction risks: expressed in the 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 share is a derivative that completely depends on the exchange that issued it. If the platform starts having problems, the trader risks being left with nothing, as they have no rights to the real securities. The legal status of transactions is in a gray area due to the lack of clear regulation.

Fyodor Ivanov, Director of Analytics at AML/KYT 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, in his opinion, is formulated as follows: when bringing such funds into the Russian regulated framework, the question of the legality of their origin remains open. The difficulty is not so much in explaining the origin of the funds to the bank, but in ensuring that a bank working with cryptocurrency understands these explanations.

Considering Regulatory Norms

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 about 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 for 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. But buying them on a foreign exchange directly for rubles will be prohibited. However, technically this is already impossible, as foreign platforms do not accept rubles.

Expert Conclusions from Cryptalist

The main divergence among experts lies in assessing the scale of trading. Igor Plotnikov considers this method a popular way of investing among active traders from Russia. Alexander Nam and Yaroslav Kabakov classify it as a narrow niche for professionals. In describing the risks, the analysts are unanimous. The speakers emphasize that a tokenized share is merely a derivative without rights to the real asset. Because of this, the investor is vulnerable to sanctions and freezes. Fyodor Ivanov also reminds of the problem of confirming the legality of income when returning it to Russia. As for the future, Yaroslav Kabakov and Alexander Nam expect the emergence of safe domestic DFAs. From my point of view, the current practice is a temporary and risky surrogate. Until clear regulation and protected instruments appear within the country, trading tokenized shares will remain a high-stakes game, where the main risk is not a market downturn, but a sudden freeze of assets by a foreign platform.