Real stocks are the present; "fake stocks" are the future.

By: Joe Zhou, Foresight News

The "US stocks" you buy on crypto platforms might not be real stocks at all.

"No dividend rights, no voting rights, no protection under securities laws, and no ability to transfer the stocks to Futu or Interactive Brokers. Essentially, it's just a 'credit promise with no legal effect'—not real stock," said Can Sun, co-founder of Backpack.

Over the past week, I spoke with executives from four institutions that have ventured into tokenized US stocks. Interestingly, different institutions gave completely different answers about the same product.

Among all interviewees, Can Sun's experience is particularly unique.

Six years ago, he was FTX's legal director and witnessed the first large-scale attempt by a leading crypto exchange to bring stocks on-chain; five years ago, when Coinbase went public and wanted to tokenize its own stock, he participated as an external law firm representative. Six years later, he's back.

This time, he brought in former CFTC Acting Chairman Mark and former SEC Acting Chairman Michael to join their team.

He said: In Q3 2026, users are expected to trade stocks from five countries and regions—US, Hong Kong, Japan, South Korea, and Europe—simultaneously on the Backpack crypto platform.

He added that the platform is beta-testing the stock transfer function with Futu and Interactive Brokers. "Stocks without dividend or voting rights are not real stocks."

The following is his first-person account.

What You're Buying Isn't Real Stock

I've been working on tokenized US stocks in the crypto industry for six years.

This sector has gone through multiple waves—2018 STOs, 2020 FTX stock tokens, 2021 Coinbase exploration, 2024 xStocks boom, 2026 Binance bStocks...

Over six years, entrepreneurs have tried to bring stocks into the crypto world one after another, but most have failed.

However, six years ago, no one needed tokenized US stocks. Six years later, everyone is looking for them.

Now, almost all major exchanges are doing the same thing: tokenizing stocks. Coinbase is doing it, Kraken is doing it, Binance is doing it, Bitget is doing it. Even Nasdaq and NYSE are doing it. Of course, we're no exception.

However, the products offered by different platforms vary drastically. Some are real stocks, others are just price mirrors of stocks—same price, but completely different rights.

There are a few simple ways to determine if the "US stocks" you buy on a crypto platform are real:

• Do you have dividend rights?
• Do you have voting rights?
• Which region's laws regulate it?
• Can it be transferred to traditional brokers like Interactive Brokers or Futu? (This feature is in beta testing)

The answer is: The US stocks on Backpack meet all these conditions. But few other platforms can do this.

Many platforms offer so-called "stocks" without dividend rights, voting rights, no legal regulation, and no transferability. These are the typical characteristics of "fake stocks."

Real stocks are legally protected and have complete rights. Backpack Securities holds a brokerage license and is regulated by New York state law; clearing and custody are handled by RQD Clearing, a clearing broker, and it finally connects to the DTCC system.

In other words, the stocks you buy on Backpack are essentially the same asset as those bought on Futu or Interactive Brokers. You have voting rights, dividend rights, property rights, and your name will appear directly on the company's shareholder register.

Tax-wise, under the Sino-US tax treaty, mainland Chinese residents enjoy a preferential dividend withholding tax rate of 10% (standard rate is 30%), a benefit only available to a few countries like China and Japan globally.

After a listed company distributes dividends, the money legally belongs to you; the platform has no right to delay or withhold it. Even if the platform faces operational risks, your assets are strictly segregated. For every share a user buys, we must hold a corresponding real share in the clearing system—this is a core requirement of US securities regulation.

These are what real stocks should look like.

Real Stocks Are the Present; "Fake Stocks" Are the Future

Real stocks are of course meaningful. But fake stocks, i.e., on-chain stocks—also have their value. I'll point out two points.

First, fake stocks are expected to become real stocks soon.

Most tokenized stocks in the market currently use an SPV (Special Purpose Vehicle) structure: the SPV acts as the legal holder of the stock, then issues tokens representing rights to users. What users actually hold are SPV rights, not the stock itself.

From a strict legal definition, such assets are not yet real stocks—existing securities legal frameworks do not support stocks existing completely outside the traditional registration and clearing system.

But this situation is changing. DTCC will officially launch on-chain stocks in the second half of this year. Once implemented, these will be legally protected on-chain stocks (of course, they require KYC). Backpack has officially joined the DTCC working group.

Second, tokenized stocks and Perp stocks are naturally suitable for high-risk investors.

We are also working on the second type of stock—on-chain US stocks (tokenized stocks), i.e., SPV-structured US stocks. These assets have many use cases: leverage, arbitrage, lending, contracts, etc.

Backpack will not actively encourage users to do this in the short term, but once assets are on-chain, users can decide how to use them—we won't and can't prohibit it.

We are collaborating with Solana and Sunrise to build application scenarios for on-chain tokenized assets. All tokenized stocks on Solana are minted and redeemed through Backpack. If you want to truly hold meaningful stocks on Solana, you have to come to us.

How Things Change Over Six Years

How things change over six years. Tokenized stocks are no longer what they used to be.

Six years ago, FTX launched trading for tokenized stocks like Apple, Tesla, and Microsoft. As a result, almost no one bought them.

Six years later, institutions like Binance, Bitget, Coinbase, Robinhood, Kraken, and even Nasdaq and NYSE have shifted their strategic focus to this sector. For the first time, the industry has formed a consensus: the crypto world needs its own stock market.

Six years ago, it was the height of DeFi Summer. The entire industry was immersed in the wealth effect of high-volatility assets. It was not uncommon for a popular token to rise 30%, 50%, or even double in a day. Who would buy Apple or Microsoft stocks that fluctuate less than 5% a day?

Six years later, the entire era and market environment have changed.

The AI wave has led to轮番 rises in global stock markets; SEC Chairman Paul Atkins publicly stated that tokenization is an unstoppable future trend; Hong Kong brokers like Futu and Tiger have started to exit mainland users, releasing huge existing demand... All these have boosted the growth of "on-chain stocks."

In this process, we have built three key differentiators.

First, fees are aligned with traditional brokers. Exchanges like Binance set their own fees, but Backpack's fees are fully aligned with traditional brokers—much lower than crypto exchanges.

Second, catering to two types of investors. We offer both real stocks (with dividends, voting rights, transferable) to reassure conservative investors; and on-chain stocks to allow high-risk investors to freely participate in DeFi.

Third, in Q3 2026, users are expected to trade stocks from five countries and regions—US, Hong Kong, Japan, South Korea, and Europe—simultaneously on Backpack. Taiwan stocks have been performing well recently, and we are in talks about that too. This multi-market layout is something most brokers and crypto platforms cannot achieve.

Crypto's Biggest Ceiling Is Being Confined to Crypto

After talking about products and advantages, I want to share our vision.

Over the past decade, the entire industry has been trading the same set of assets: BTC, ETH, SOL, Memes, perpetual contracts... Back and forth, essentially inward competition in a $3 trillion pool.

But the stock market is over $100 trillion, the bond market over $130 trillion, and the foreign exchange market over $300 trillion. The compliant Perp market is what I consider a blue ocean.

The real big market is never inside Crypto; it's outside Crypto.

Currently, the Crypto industry accounts for less than 1% of the entire financial industry. What we want to do is participate in the process from $3 trillion to $100 trillion.

Our vision is to become a true financial industry company in the next 50 or even 100 years. US stocks are just the starting point; blockchain technology will drive profound changes in the financial industry in more areas.

Over the past decade, Crypto has been trying to create new assets. In the next decade, Crypto's more important task may be to bring the world's largest asset markets on-chain.

And stocks are just the beginning.