Deutsche Borse Group put $200 million into Payward, the parent company behind crypto exchange Kraken, acquiring a 1.5% fully diluted stake in a secondary transaction. The deal closed the same day Arjun Sethi, Kraken’s co-CEO, confirmed at the Semafor summit that the firm has confidentially filed for a U.S. IPO — a revival of plans the company publicly paused just four weeks earlier amid the crypto winter that sent bitcoin 40% below its October peak.

Kraken and Deutsche Borse were not available for comment beyond their prepared statements. The transaction is expected to close in Q2 2026, pending regulatory approval.

The $13.3 billion implied valuation is a haircut. Kraken carried a $20 billion price tag in a November share sale that raised $800 million from the biggest names in TradFi market-making: Ken Griffin‘s Citadel Securities alone wrote a $200 million check, matched by participation from Jane Street, DRW Venture Capital, HSG, Oppenheimer Alternative Investment Management, Tribe Capital, and Sethi’s family office.

Kraken filed confidentially for an IPO the very next day. The firm posted $1.5 billion in revenue in 2024 and, by its own disclosure, had already eclipsed that total in the first three quarters of 2025. The valuation still dropped roughly a third in five months.

That gave Leithner a dip to buy.

But the money is secondary to the plumbing. The two firms announced a strategic partnership last December that maps out the real prize: making Eurex-listed derivatives tradeable on Kraken, and distributing securities held in custody at Clearstream in tokenized form to Kraken’s clients. Deutsche Borse plans to connect its 360X digital asset venue and Clearstream infrastructure directly with Kraken’s xStocks platform — the tokenized equities business issued by Kraken’s Backed subsidiary that now lists 100 U.S. stocks and ETFs, targets 500 by year-end, and has processed more than $25 billion in total volume with $4 billion settled on-chain and 85,000-plus unique holders since launching in June 2025.

In the first phase, Kraken integrates with 360T, Deutsche Borse’s foreign exchange venue. Together they will build white-label solutions for banks and fintechs to offer crypto trading and custody across Europe and the U.S. The longer play: Clearstream’s custody pool — roughly $20 trillion in assets — gets a tokenized distribution channel to Kraken’s base in 110 countries.

Meanwhile, 360X and Clearstream are already working with Nathan Allman‘s Ondo Finance to list tokenized versions of Apple, Amazon, Nvidia, Tesla, Meta, Google, Microsoft, and SPY and QQQ ETFs on the 360X venue — the largest bulk listing on the platform to date, issued on Ethereum, Solana, and BNB Chain. Ondo’s assets will eventually flow into Clearstream’s custody, settlement, and collateral infrastructure. Leithner is building an assembly line.

Nasdaq Got There First

Leithner is buying a pipe that someone else already built. On March 9, Nasdaq and Payward and Backed announced their own partnership — an “equities transformation gateway” that will let tokenized shares move between Nasdaq’s regulated order books and the xStocks ecosystem on public blockchains, while preserving issuer rights and regulatory safeguards. Nasdaq expects the system to be operational in the first half of 2027.

The design principle, according to Nasdaq president Tal Cohen, is issuer-first:

“Most of tokenization has happened without the issuers in mind. Our effort is focused on the issuer,” Cohen told The Wall Street Journal. Nasdaq’s September 2025 SEC proposal pairs tokenized and traditional shares under the same CUSIP, settling through DTC — not a separate venue, but the same security in two forms. Corporate actions, proxy voting, and shareholder communication stay in the issuer’s hands.

That means Kraken is now the settlement rail for two TradFi exchange giants at once. Frankfurt and New York both picked the same partner within 36 days of each other. Leithner’s check is not a one-off bet on a crypto upstart — it is Europe catching up to a dance that had already started.

There is another signal behind the credibility reweighting. On March 4, Kraken’s banking unit became the first crypto firm to win a Federal Reserve master account — direct access to Fedwire, the same payment rail the banks use. Sen. Cynthia Lummis called it “a watershed milestone in the history of digital assets.” Bank lobbies howled. But the approval meant that by the time Cohen and Leithner each put pen to paper, Kraken was no longer a counterparty the compliance team needed to triangulate through intermediary banks. The firm was plugged into the Fed.

The Tokenized Equities Arms Race

Leithner is not the only one who sees the wave. Every major exchange is scrambling for position, and the crypto-native firms are racing from the other direction.

Nasdaq moved on two fronts. Nine days after the Kraken partnership, on March 18, the SEC approved rule change SR-NASDAQ-2025-072, letting the exchange trade certain securities in tokenized form during a pilot run by the Depository Trust Company. Eligible assets: Russell 1000 stocks and index-tracking ETFs including the S&P 500 and Nasdaq-100. Tokenized and traditional shares trade on the same order book with the same execution priority. The first tokenized trades on Nasdaq could hit by end of Q3 2026.

NYSE announced its own tokenized platform in January — 24/7 trading, instant settlement, stablecoin-based funding, fractional shares. In March, NYSE tapped Carlos Domingo‘s Securitize as the first digital transfer agent eligible to mint blockchain-native securities for issuers on the platform. ICE is working with BNY Mellon and Citi to support tokenized deposits and collateral.

DTCC itself got no-action relief from the SEC in December 2025, giving it a three-year window to run tokenization services. The DTC pilot lets participants tokenize security entitlements in Russell 1000 equities, U.S. Treasuries, and index-tracking ETFs — and move the resulting tokens between registered wallets on approved blockchains without DTC intermediating each transfer.

That is the TradFi side of the table. The crypto side is moving just as fast.

Kraken‘s xStocks are live in 110 countries — not the U.S. — with perpetual futures on tokenized equities offering up to 20x leverage, 24/7. Vlad Tenev‘s Robinhood launched its own blockchain in February — Robinhood Chain, built on Arbitrum — and already has over 2,000 tokenized U.S. stocks and ETFs live for EU customers. Tenev has been telling anyone who will listen that tokenized stocks could prevent another GameStop-style freeze. Coinbase is building Coinbase Tokenize, an institutional platform for tokenizing real-world assets including equities, with tokenized stocks planned for 2026. And Ondo is not just working with Clearstream — Allman tokenized five Franklin Templeton ETFs on Solana and got listed on Binance in February.

The pattern is unmistakable. Traditional exchanges are building tokenized venues. Crypto exchanges are tokenizing traditional assets. Both sides are converging on the same product: a stock that settles on a blockchain, trades around the clock, and can be fractionalized down to a dollar.

Why Arjun Took the Haircut

A 33% valuation cut in five months is not a normal secondary. Arjun Sethi is no stranger to the math. He runs Tribe Capital in addition to his Kraken seat — a $1.6 billion data-driven fund he co-founded in 2018 that has put money into FTX, Carta, Relativity Space, Docker, and Sfox, among others. He has watched a lot of cap tables get repriced. In October 2022 he told The Economic Times that up to 50% of startups would “have to sell or shut amid funding winter.” He does not wait for valuations to come back. He transacts through winters.

The haircut is the price of entry. What is on the other side of it is the one piece of the tokenization stack Kraken could not build or buy on its own.

Kraken’s xStocks are live in 110 countries — and banned from the one that matters most for scale. The U.S. retail market is walled off. That is why the $25 billion in cumulative volume is not $250 billion. Sethi cannot bootstrap his way past a regulatory perimeter. He has to buy a pipe into the jurisdictions that are open to him, and the richest jurisdiction open to him is Europe.

Clearstream sits on $20 trillion in custody and carries a name every fundster and prime broker on the continent trusts. Eurex is the largest derivatives exchange in Europe. 360X is a regulated digital asset venue with a live Ondo listing. 360T is one of the biggest FX platforms in the world. These are not items Sethi can list organically. They are licensed infrastructure. Leithner’s $200 million check gives him all of it at once, bundled with a white-label wrapper that lets European banks and fintechs offer crypto trading and tokenized equities under the Kraken rail.

It is also the Sethi playbook. When he wanted Mexico, he co-founded Kapital in December 2023, raised $165 million, and acquired Banco Autofin Mexico — bolting a licensed bank onto a tech stack to unlock a regulated market. When he wanted India, he formed Tribe Capital Management India Pvt Ltd in Gurugram in April 2024 and pointed 20% of Tribe’s AUM at the subcontinent. The Leithner deal is the European chapter of the same book. Buy the license. Lease the distribution. Pay in equity.

The valuation will correct. The distribution channel is permanent.

As an aside, the check also solves an IPO problem. Kraken has tried this twice before. Jesse Powell, Kraken’s co-founder and original CEO, announced plans to take the firm public in the second half of 2022; the crypto winter of that year killed the filing before it arrived, Powell stepped aside as CEO that September, and for the next three years Kraken stayed private while Coinbase, Circle, and Galaxy all beat it to public markets. Sethi and co-CEO David Ripley filed confidentially last November at a $20 billion valuation, ten days after closing an $800 million secondary led by Ken Griffin‘s Citadel Securities with $200 million in — followed by Jane Street, DRW, HSG, Oppenheimer Alternative Investment Management, Tribe Capital, and Sethi’s family office. A second crypto winter forced the listing back onto the shelf last month. Add the February firing of CFO Stephanie Lemmerman — replaced by deputy CFO Robert Moore in a reorganization that shifted finance from back office to product — and the picture is a firm that needed to reset its IPO story from the ground up. Leithner’s pre-IPO check, stacked on top of the Nasdaq-Backed partnership from March 9 and the Fed master account approved on March 4, is that reset. It says the grown-ups are in the room, and they brought their own furniture. The third time has to be the charm.

Why Stephan Is Steering for the Inside Lane

Sometimes a strong offense is the best defense. This is one of those times.

Leithner is not playing catch-up. He is cutting to the inside of the track, where the lap is shortest and the corner belongs to whoever gets there first. The $200 million check is not a hedge.

The man holding the pen is built for the play. The Austrian economist ran Deutsche Bank’s capital markets and M&A business for fifteen years and sat on its executive board from 2012. Before that he was a partner at McKinsey. He moved to Deutsche Borse’s board in 2018 and took the CEO chair on January 1, 2025. He is also a director at Digital Asset Holdings, the DLT firm behind the Canton Network — the same consortium that already includes Euroclear, Euronext, LSEG, and TreasurySpring. He is not a curious generalist who needs tokenization explained. He has been designing the plumbing for a decade, and he knows exactly which piece of the stack every one of his competitors is missing.

They are all in the race. Each of them is still building their engine.

• LSEG announced its Digital Securities Depository in November 2025 — on-chain settlement, multi-chain, interoperable — and rolls out the first phase of its Digital Markets Infrastructure in 2026 on Microsoft Azure, targeting fixed income, equities, and private markets. London has the settlement layer and no retail crypto distribution.

• SIX Group launched SIX Digital Exchange in 2020 and is now feeding data to Chainlink. Zurich has a five-year head start on the tech and a tiny footprint outside Switzerland.

• Euronext took a stake in Tokeny in 2019 and went quiet. Amsterdam, Paris, Brussels, and Dublin between them have no native tokenized-equity venue live.

• Euroclear sits alongside Clearstream in the post-trade duopoly and is in the same Canton working group — still waiting on its own retail wrapper.

Leithner just picked up what every one of them is still shopping for. In a single check he got a crypto exchange with an IPO in the pipeline, a tokenized-equities issuance engine through Backed, a subsidiary already partnered with Nasdaq five weeks earlier, the fastest-growing retail xStocks platform in the business, and a white-label rail that European banks and fintechs can plug into tomorrow. Clearstream handles the custody. Eurex handles the derivatives. 360X handles the digital venue. 360T handles the FX. The Kraken stake handles the front door.

The shape of what Leithner is building is now visible. Deutsche Borse’s own Horizon 2026 strategy commits the firm to “an expansion of the leading position in the area of digital platforms for existing and new asset classes.” That phrasing — “leading position” — is not defensive. The D7 digital securities registry is the back end. The Kraken deal is the front end. Together they form a full-stack digital capital market with a New York anchor (the Nasdaq-Backed partnership), a Swiss custody pool (Clearstream), and a Brooklyn-born crypto exchange (Kraken) all wired into the same plumbing and flying Frankfurt’s colors.

LSEG has to build its own retail distribution from scratch. SIX has to build continental scale. Euronext has to build everything. Leithner just bought all three in a secondary transaction for $200 million — a rounding error against the €24.5 billion market cap Deutsche Borse Group carries. By transacting with the same counterparty Tal Cohen transacted with, he is ensuring that when the tokenized equity rails settle into their permanent form, there are exactly two gravitational centers — Frankfurt and New York — and he is already inside one of them with a seat on the other’s settlement partner.

The Bottom Line

Tokenization of equities has been on the five-year roadmap of every major capital-markets firm since R3 launched Corda in 2016, and for a decade the pipeline never moved past pilots. Something changed this quarter. Nasdaq tied itself to Backed on March 9. Frankfurt wrote a check on April 14. The DTC pilot is live. The NYSE venue is under construction. LSEG‘s depository is in regulatory review. Robinhood has its own blockchain. Coinbase has a tokenization platform. The Fed let a crypto firm onto Fedwire for the first time in history.

Operators at Kraken’s stage do not accept 33% down rounds unless what is on the other side of the check is worth more than the valuation they are surrendering. Deutsche Borse does not pledge Clearstream’s $20 trillion custody pool to a technology it thinks is years away from mattering. Nasdaq does not put an equity-token design in front of the SEC as a hedge. Both sides of this trade — the one eating the haircut and the one writing the check — are transacting as if the tokenization of equities is happening now, not someday.

That is what the Sethi-Leithner handshake means. The tokenized stock era is not coming. It is arriving. The only question left is which firms own the rails when it does.

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Arjun Sethi, Co-CEO, Kraken

Related Coverage:

• Deutsche Borse Group Acquires a Stake in Kraken for $200 Million — Deutsche Borse press release — April 14, 2026

• Deutsche Borse Takes $200 Million Stake in Crypto Exchange Kraken — Bloomberg — April 14, 2026

• Deutsche Boerse Acquires $200 Million Stake in Kraken — Reuters — April 14, 2026

• Deutsche Borse (DB1) Buys 1.5% of Crypto Exchange Kraken for $200 Million — CoinDesk — April 14, 2026

• Deutsche Borse Invests $200m in Kraken Crypto Exchange Group — Ledger Insights — April 14, 2026

• Kraken Revives IPO Plans as Deutsche Borse Invests $200 Million — Quartz — April 15, 2026

• Crypto Exchange Kraken Confirms It Has Confidentially Filed for an IPO — CNBC — April 14, 2026

• Deutsche Borse Enters Into Strategic Partnership With Kraken as TradFi Bridge — Ledger Insights — December 2025

• Kraken and Deutsche Borse Announce Strategic Partnership — Kraken Blog — December 2025

• Nasdaq Partners With Kraken in Plan for 24/7 Tokenized Stock Trading — The Wall Street Journal (Vicky Ge Huang) — March 10, 2026

• Nasdaq to Launch Equity Token Design, Putting Issuers at the Center of Tokenization — Nasdaq press release — March 9, 2026

• Nasdaq and Kraken Are Teaming Up to Let You Trade Tokenized Stocks — CoinDesk — March 9, 2026

• Kraken Becomes First Crypto Firm to Win Access to Fed’s Core Payments System — The Wall Street Journal (Alexander Osipovich and Dylan Tokar) — March 4, 2026

• Payward, Parent of Crypto Exchange Kraken, Puts IPO Plans on Hold — CoinDesk — March 17, 2026

• Kraken Joins Wave of Crypto Firms Filing to Go Public — The Wall Street Journal (Vicky Ge Huang) — November 19, 2025

• Kraken Fires CFO Stephanie Lemmerman as Long-Awaited IPO Draws Closer — CoinDesk (Ian Allison) — February 10, 2026

• Kraken Co-Founder Jesse Powell Steps Down as CEO of Crypto Exchange — Bloomberg — September 21, 2022

• Arjun Sethi (Entrepreneur) — Wikipedia — accessed April 16, 2026

• Stephan Leithner — CV — Deutsche Borse — accessed April 16, 2026

• Deutsche Borse Announces New Investment Strategy Dubbed Horizon 2026 to Tap on Digital Assets — Coinspeaker — accessed April 16, 2026

• LSEG Plans Digital Securities Depository for On-Chain Settlement — Ledger Insights — November 2025

• Major European SIX Group Stock Exchanges Feeding Data to Chainlink — The Block — accessed April 16, 2026

• SEC Approves Nasdaq’s Move to Allow Tokenized Securities Trading — CoinDesk — March 18, 2026

• NYSE Taps Securitize to Build Tokenized Securities Platform — CoinDesk — March 24, 2026

• NYSE to Launch New Venue for Tokenized Stocks — Ledger Insights — January 2026

• DTCC Authorized to Offer New Tokenization Service — DTCC — December 11, 2025

• Clearstream and Ondo Bring Tokenized Equities Infrastructure to Europe — Tokenization Insight — April 2026

• Robinhood Launches Test Version of Its Own Blockchain — Fortune — February 10, 2026

• Coinbase Plans All-in-One Exchange for Crypto, Stocks, and Commodities — Yahoo Finance — December 2025

• SEC Release 34-105047: Nasdaq Tokenized Securities Rule Change — U.S. Securities and Exchange Commission — March 2026

Related Stories:

• Andrew Crosses the Divide — CeFiWire — April 7, 2026

• Hoops is Looking at Deals, Sets DWS on Tokenization Path — CeFiWire — February 2023

Stephan Leithner, CEO, Deutsche Borse Group.

Andrew Schlossberg is putting Invesco’s $2.2 trillion AUM name behind Superstate’s USTB — the $967 million tokenized Treasury fund that Robert Leshner built to prove to Wall Street the RWA concept works. In the Gensler era, fund firms fled from moves like this; in the Atkins era, we will see more follow Schlossberg’s lead.

Under the deal, Invesco’s global liquidity team, led by chief investment officer Laurie Brignac, takes over as investment manager of USTB. The fund gets a new name — Invesco Short Duration US Government Securities Fund — keeps its USTB ticker, and transitions in Q2 2026. Invesco’s Kathleen Wrynn, global head of digital assets, drove the partnership.

USTB carries real weight. It has processed billions of dollars in transactions for more than 150 institutional investors and ranks fourth globally among tokenized real-world asset funds. Leshner built the fund right — the problem was getting shareholders through the door. Compliance officers at large asset managers, CIOs at RIAs, and those building the models at wirehouses don’t know his name. Schlossberg gives them one they do.

“Invesco has been strategically building the capabilities required to support institutional-grade digital asset products since 2019, and this partnership reflects that long-term commitment,” Wrynn said.

The Wrynn hire itself is a tell. She ran the DLT business at JPMorgan — specifically Kinexys, the rebranded Onyx platform, the most mature institutional blockchain deployment on the Street. Before that: DWS Group and Deutsche Bank. Schlossberg didn’t hire a crypto person. She is not the only JPMorgan blockchain alum now running digital assets at a major institution — Christine Moy left the same shop to lead digital assets at Apollo. Jamie Dimon’s team is the farm team for the current free agent pool that Schlossberg and other savvy TradFi leaders are fishing in.

The backstory matters. Leshner co-founded Compound in 2017 and built one of the first DeFi protocols — a lending market that, at its peak, held billions in user funds governed by a token that anyone could trade. That track record would have killed a deal like this cold 12 months ago. Schlossberg shaking Leshner’s hand is the signal. It tells the industry the wall between DeFi-native founders and TradFi asset managers is coming down.

Superstate’s infrastructure makes the handshake easier. Leshner registered Superstate Services as an SEC-registered transfer agent in March 2025 — meaning Invesco is not building on rogue DeFi rails but on SEC-blessed ones. The compliance officers Schlossberg is giving cover to can point to the registration.

Schlossberg telegraphed this move ten months ago. At the ICI Leadership Summit in May 2025, he told the room of mutual fund honchos that tokenization “is way bigger than digital assets” — that it is “another angle on how we’re going to be able to democratize parts of private markets” and cut “the costs that we all bear and our clients bear.” Infrastructure, not product.

“Rather than fighting the tape,” he said, “everybody coming together to do it is going to make this a lot more successful.”

Robert Sharps, CEO of T. Rowe Price, sat beside him in front of the gathered fund leaders and played the role of the wizened TradFi skeptic, offering counterpoint with sharp precision.

“Much of what you’ve seen so far is largely commoditized,” Sharps said. “Spot Bitcoin exposure — I’m not sure we can offer something differentiated in that realm.” His question for the space: “What role should digital assets play in a multi-asset portfolio, or is there an underlying building block that is unique and differentiated?”

The USTB deal is Schlossberg’s parry. It is also, quietly, a sharper version of Sharps’ question thrust back at him.

The competitive read is not subtle. BlackRock’s BUIDL, powered by Securitize, is the largest tokenized RWA fund on the market. Larry Fink moved first and loudest. Schlossberg is making the same calculation Fink made — that the infrastructure question is settled enough to put a flagship liquidity franchise on the line.

Also worth watching is Fidelity. Cynthia Lo Bessette, who heads digital asset management at the Boston Behemoth, was publicly bullish on tokenized Treasuries when she took the Ondo Summit stage in February. That is not a surprise: Fidelity partnered with Ondo on its own tokenized money market fund last September.

But there is a second angle here that few in the trades have connected yet.

On March 18, the SEC approved Nasdaq’s rule change allowing ETFs tracking the S&P 500 and Nasdaq-100 to trade in tokenized form through the DTCC’s pilot program. Invesco is the sponsor of the PowerShares family of ETFs, including QQQ — the famed Nasdaq-100 fund. NYSE announced its own tokenized securities platform in January, partnering with Securitize for 24/7 onchain trading of equities and ETFs. Nasdaq is also planning to offer tokenized ETF shares. The wave is not on the horizon — it is about to break.

Schlossberg’s move gets Invesco’s team in position to catch it and surf a gnarly ride. Working inside Superstate’s digital transfer agent infrastructure is not just a product launch. It is on-the-job training for the team that will eventually manage tokenized QQQ.

This is also not Invesco’s first tokenization deal — it’s the second. In February 2025, Wrynn’s team partnered with DigiFT in Singapore to tokenize a $6.3 billion private credit fund. Start where the regulation is friendlier, build the muscle, then bring it home when the Atkins window opens. USTB is step two in a sequence, not a one-off.

Invesco has been patiently scouting the tides. In November 2024, the firm co-authored a report with Boston Consulting Group and Aptos Labs calling tokenized funds “the third revolution in asset management” — after mutual funds and ETFs — and projecting the category could reach $600 billion in AUM by 2030. The USTB deal is the firm putting money behind its own thesis.

The Invesco-Superstate deal makes just as much sense from the other side of the table. The fund business is a distribution business — advisor relationships, institutional sales teams, brand recognition on a compliance-approved list. Leshner has none of that. Today he is focused on building Opening Bell infrastructure for the tokenizers.

Mike Novogratz’ Galaxy Digital tokenized its GLXY shares through Superstate’s Opening Bell platform last September — the first public company to issue SEC-registered equity directly on a blockchain.

So, rather than strengthening a weakness, Leshner is building on a strength. The USTB deal offloads a problem — running a fund against firms with trillion-dollar brands and decades of institutional relationships — and creates a customer for his rails, all in one move. Leshner is not exiting the tokenized fund business. Every TradFi firm that wants to tokenize a product is now a potential Superstate client, not a competitor.

Leshner knows he is not the only one building rails. Mike Cagney’s Figure Technologies launched its own competing network — OPEN, running on Provenance Blockchain — and debuted tokenized FGRD shares in a $150-million secondary offering earlier this year. Two DeFi-rooted founders, two SEC-registered platforms, both racing to become the plumbing TradFi builds on. The Mike v. Mike battle for tokenized equity infrastructure is one to watch.

Schlossberg likely sees infrastructure training for his team and a fund he can sell. Leshner sees a distribution problem solved and a platform business born.

Kathleen Wrynn, global head of digital assets, Invesco.

Source: Invesco / Superstate press release

Related Coverage:

• Invesco takes over Superstate’s $900 million T-bill fund as Wall Street accelerates tokenization push — March 24, 2026

• Invesco Hires Crypto Product Leader from JPMorgan — June 16, 2025

• Invesco partners DigiFT for tokenized private credit fund — February 18, 2025

• SEC Release 34-105047

Related on CeFiWire:

• Compound’s Leshner Joins the World of Mutual Funds, Takes on Franklin Templeton — July 5, 2023

• The World Turned Upside Down — September 7, 2025

That has all changed thanks to Mike Novogratz and Superstate founder Robert Leshner. Novogratz, a one-time Princeton wrestler, Goldman salesman and “BSD” at Fortress, has long wanted to offer Galaxy’s shares both in the United States and as a token. This year, he has accomplished both goals. Last spring, Galaxy relisted its shares from Toronto to New York and last week it partnered with Leshner’s Superstate to offer shares recordkept on Solana as the primary record. Superstate is the SEC-approved transfer agent and has developed the blockchain-based system. The Galaxy shares are also part of Superstate’s Opening Bell platform.

As Galaxy points out in its white paper — if you are in TradFi, you had better read it — blockchain is really just a new way to keep records. Tokens, it turns out, are really just an entry in an elaborate spreadsheet.

Long ago, shareholders used sheets of paper with signatures to recordkeep their ownership. Then, when they tired of trekking along Manhattan’s streets to the Buttonwood Tree and cafes on Wall Street, share owners deputized agents to record the transfers of their stakes on the pages of ledger books. Many years later, the SEC made even the most reluctant of those transfer agents keep their records in computer databases. And so, the DTCC. Blockchains are the next logical step in that evolution.

Galaxy’s white paper astutely points out that blockchain recordkeeping now allows shareholders to custody their shares themselves in their own blockchain wallet. Thus, we are returning full circle to a world in which you can sell your shares to someone directly, no intermediary needed. Only you do not have to make a trip to a cafe.

As of yet, Galaxy’s shares are the only ones you can keep on your new Solana phone. And there is no compelling advantage to holding the shares in tokenized form. While Galaxy details a step-by-step process to convert shares through a DRS transfer to Equiniti from your brokerage account to tokens, the Galaxy white paper admits that there is no existing market to trade share tokens. Leshner and Novo do promise that they are working with the SEC to create AMMs for peer-to-peer trading, but there is no timeline on when that will happen.

Still, the future is here and CEOs had better be working on a strategy to survive and thrive. Especially if you are Jeffrey Sprecher.

Sprecher is the CEO of the Intercontinental Exchange (ICE), which owns both the London and New York stock exchanges. ICE, you could say, is the direct descendant of those coffee houses that evolved into what we have today. If tokenization takes us back to the past, Sprecher is going to have to have a plan. The question is whether he is aware. News this week suggest that he may be awake to the change.

This past week Marcus Lemonis, the fixer who took over as CEO of Overstock (now Bed Bath and Beyond) last spring, sent a letter to the board of tZERO asking it to fire its CEO David Goone. Interestingly, Goone worked as ICE’s chief strategy officer prior to taking the top job at tZERO. Lemonis, who has a television show on Fox in which he advises small business owners on how to fix their operations, was upset that Goone ignored Lemonis’ earlier request a few weeks back to IPO tZERO. Lemonis, it turns out, desperately needs cash to open new Bed Bath & Beyond (BB&B) stores and as BB&B owns forty percent of tZERO, an IPO would meet his needs nicely. Lemonis is also working sans salary and needs BB&B shares quintuple in value to hit $45 for his first payday. Let’s say he appears to be motivated to make a deal.

Sprecher’s ICE is the other large stakeholder in tZERO. It also owns forty percent of the blockchain startup. While it ignored Lemonis’ first letter, this time the board listened. On Thursday, Goone was gone and tZERO’s board named Alan Konevsky the new CEO. Konevesy had been tZERO’s chief legal and corporate affairs officer and before that its interim CEO until 2022.

All of this likely means that tZERO must be “in play” and that Sprecher at ICE is going to have to make a decision soon. Lemonis is looking for a buyer of BB&B’s tZERO stake and ICE is the logical candidate. If stock markets are going on blockchain, buying the remainder of tZERO will signal ICE’s and Sprecher’s commitment to the future. The fact that tZERO has little substance in its business today — along with Prometheum it holds one of two existing special purpose broker-dealer licenses, has some blockchain technology but no meaningful revenue — is less important than Sprecher sending a message to his troops that the future is coming.

Buying the majority of tZERO’s shares could also head off competition. What form could that take? Well, Mike Cagney is prepping the IPO of his latest startup for this coming Thursday. His company — Figure Technology Solutions — is also working on natively tokenizing its stock through its Provenance blockchain. Cagney has also stated his ambition is to create the “Nasdaq” of the next century when he was making a play for the Celsius bankruptcy estate. Figure’s IPO will give him a war chest and currency to make deals of his own.

There is one final thread that unraveled in the past week that is worth pulling on: David Newns, the CEO of the SIX Group’s former SDX business stepped down. For those not in the know, SIX is the owner of the Zurich and Munich stock exchanges and spent the first half of this decade creating tokenized equities though its SIX Digital Exchange (SDX) arm. Under Newn’s leadership, SDX went live in 2024 and last spring, SIX absorbed SDX into its servicing business. Yes, it turns out that SIX, not Galaxy, was the first to natively tokenize shares of stock, but if it happened in Zug, no Americans notice.

What Newns is up to now is anyone’s guess.

Related Stories

• Donna Takes State Street on a Dual Track to Digital Assets, July 13, 2023

• What is State Streetup to? May 31, 2023’

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It delayed them for another 45 days.

Those awaiting a decision mark mid-October for the next SEC action on the decision. And don’t be surprised if the regulators smash the “delay” button once again.

— Sean Hanna, Editor

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The Most Read Five

1. Christoph Taps Securitize to Tokenize a BlackRock ETF

Yet another company is wrapping a BlackRock ETF in a security token to create a parking spot for Web3 company idle cash. (August 30, 2023)

2. What Does Grayscale's Legal Victory Mean?

Spot bitcoin ETFs could open the advisor market to DLT-based investments. U.S. advisors control more than $30 trillion of financial assets.

3. 401(k)'s David Loses to DoL Goliath

A startup 401(k) plan recordkeeper loses its challenge against the DoL crackdown on Bitcoin in retirement plans. (August 31, 2023)

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* * *

In other news widely reported last week, the Treasury Department is formalizing how crypto providers will need to retain and report records to the IRS (WSJ). Patrick McHenry, the Republican who chairs the House Financial Services Committee wasted no time in weighing in on the issue, warning that the rules are part of a Biden effort to kill crypto and that any rules must be narrow (Decrypt).

In stablecoin news, Coinbase made a minority investment in Circle (Forbes). Multiple news outlets also reported on the slow uptake of PayPal’s new stablecoin. After three weeks there are 233 wallets holding 47 million PYUSD after three weeks. Lesson: Never launch during August in the midst of a crypto winter (Blockworks).

— Sean Hanna, Editor

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The Most Read Five

1. Maple Raises Funds, Returns to Solana

CEO Sid Powell has plans to move the DeFi company and its cash management pool into new markets. (August 23)

2. It's Official. Anchorage Wins EDX's Custody Mandate

EDX Markets awards its custodian mandate. (August 22)

3. Dinari Goes Live with Tokenized Stocks

The startup is offering non-U.S. investors tokens fully backed by U.S. stocks and ETFs. (August 23)

4. AsiaNext Taps a Fidelity’s Colt for High-Speed Digital Asset Trading

The blockchain-based exchange is tying into technology from a Fidelity-owned company. (August 24)

5. McKinsey Has Four Tips for Tokenizers

The report gave us déjà vu ... but share it with your c-suite anyway. (August 25)

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6. Non-U.S. Investors Get Another Token Backed by a U.S. Treasuries Fund

After nine months of gestating, DeFi platform Archblock and Adapt3r Digital have rolled out the first token from their partnership. (August 24)

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* * *

Eric Ervin’s sale of his second startup — Onramp Invest — to Carlos Domingo-led Securitize was the most interesting deal of the week. Ervin’s first startup was an Reality Shares, an ETF shop that focused on advisors for distribution.

The value of Onramp to Securitize seems open to question. The two firms already had agreements that put Securitize’s offerings in front of Onramp’s advisors and Ervin told CeFiWire that he expected to add new offerings as they become available. So, buying OnRamp is unlikely to create more distribution opportunities for Securitize than it would have had already.

On the plus side, Securitize will save any platform fees it was paying OnRamp. CeFiWire does not know what those were, but at this point that must have been negligible as there is essentially no use of these assets by advisors yet. OnRamp claims that it has RIAs that control $40 billion of assets on its platform. That is a rounding error in compared to the $3.6 trillion of advisor assets on Schwab’s platform alone. That number also doesn't reflect that advisors using OnRamp are unlikely to have a meaningful share of their assets invested in tokenized securities and that most of the advisors signed on with OnRamp to invest client assets in crypto.

On the minus side, the last three decades have shown that advisors like open platforms. If Securitize is not careful, other tokenizers may support other advisor distribution platforms as they emerge to avoid helping a rival and Onramp could find its growth inhibited.

One immediate benefit that the sale does bring Securitize is a sense of momentum. In a market where the business metrics are moving grindingly slowly, the deal shows Securitize making progress. That could help it with venture capital investors trying to identify market leaders and asset managers seeking to find a partner to tokenize their products.

Still, it is early days, so make of it what you will.

— Sean Hanna, Editor

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The Most Read Five

1. Bitgo Raises $100 million in an Up Round

The digital assets custodian raises at a $1.75 billion valuation. (August 16)

2. Jacobi ETP Goes Live, Ark ETP Faces Delay

The tale of two continents continues as Europe's first spot Bitcoin goes live and the SEC takes action delaying the approval of the first in line in the… (August 16)

3. Carlos Makes a Deal

While many take August off, Securitize CEO Carlos Domingo is keeping busy. Less than a month after going to Spain he is making a deal in San Diego. (August 17)

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The other big news of the week also involved payments … and capital markets too. The Federal Reserve announced a “novel” activities supervision program that includes the use of distributed ledger technology (DLT) by banks. It is not normal for regulators to have such a deep and abiding concern about a database technology. The action seems to underscore two points. The first the U.S. government’s deep anxiety about how this technology may allow the financial sector to operate in unknown ways. The second is the cost of the confusion most everyone has between crypto currencies and the use of blockchain to record and track data.

As Franklin Templeton CEO Jenny Johnson likes to say: Bitcoin is the biggest distraction to the biggest evolution of financial services, blockchain.

— Sean Hanna, Editor

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The Most Read Five

1. Sid Opens Maple's Cash Pool to U.S. Accredited Investors

The number four source on onchain Treasury yield adds distribution to U.S. investors under RegD. (August 11)

2. Fed’s Gibson Targets Banks’ Use of DLT for Special Oversight

U.S. regulators continue to show fear of DLT mixed with traditional securities. Now it is the Fed flagging blockchain technology for special oversight. (August 9)

3. Backed Tokenized ETFs on Four More Chains

After adding support for Polygon and Gnosis in June, the Swiss tokenizer of ETFs is adding support for another four blockchains. (August 8)

4. Bo and Bill Partner to Create Tokenized Commercial Paper

The New York City-based tokenization platform has paired up with a Puerto Rico-based bank to tokenize commercial paper. Their target is $250 million in… (August 11)

5. Archax Wins Approval to Distribute Arbdn Tokenized Money Market UCITs

The London-based company will distribute the Arbdn UCITs in Luexembourg. (August 11)

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6. Default on Goldfinch Shows How DeFi Differs from TradFi

The upside is everyone in the lending pool can see the records. The downside is reporters can also. (August 11)

7. C.D. Has to Figure Out a New Gig

Mike Cagney has pulled the application for a bank that would have been headed by the ex-CitiMortgage CEO. (August 8)

CeFiWire Resources

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