This type of fractional trading allows users of the platform to buy less than one share of stock. As a result, traders can now buy and own high price stocks without buying the whole share of stocks.
The crypto exchange’s partnership with the German financial services, CM-Equity, and Switzerland-based tokenization provider Digital Asset AG (DAAG), made this feature possible. These licensed financial institutions offer products and brokerage services for tokenized stock trading.
FTX CEO Sam Bankman-Fried explained further that,
CM-Equity is a licensed entity and conducts compliance on all of the participating customers and trades. Tokens on them are then traded on FTX and are redeemable for the underlying stocks.
On the other hand, interested traders in the tokenized trading must pass the CM-Equity security. Hence, traders must secure approval from the CM-Equity’s KYC and compliance measure. If the trader passed the requirements, the trader can now fully enjoy FTX’s tokenized stock trading 24/7.
Moreover, crypto exchange FTX is not the first exchange platform to open its door to innovation in trading. BitMax recently integrates the HARD protocol on its platform. This marks the exchange’s first cross-chain DeFi money market.