True stocks are now, "fake stocks" are the future.

Written by: Joe Zhou, Foresight News

The "US stocks" you bought on the crypto platform may not actually be stocks at all.

"No dividend rights, no voting rights, not protected by securities law, and unable to transfer stocks to Futu and Interactive Brokers. Essentially just a 'credit commitment without legal effect,' not true stocks," said Can Sun, co-founder of Backpack.

In the past week, I have interacted with executives from four institutions focusing on crypto US stocks. Interestingly, for the same product, different institutions provided completely different answers.

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

Six years ago, he was the head of legal at FTX, witnessing the first large-scale attempt by leading crypto exchanges to bring stocks onto the blockchain; five years ago, when Coinbase went public and wanted to tokenize its own stock, he participated as an external law firm. Now, six years later, he is back.

This time, he has brought along former CFTC acting chairman Mark and former SEC acting chairman Michael to join their team.

He said that by the third quarter of 2026, users can expect to trade US stocks, Hong Kong stocks, Japanese stocks, Korean stocks, and European stocks simultaneously on the Backpack crypto platform.

He stated that the platform is currently testing the stock transfer functions with Futu and Interactive Brokers. "Stocks without dividend rights and voting rights are not true stocks."

Here is his narrative.

You are not buying real stocks

I have been in the crypto industry for six years, working on "tokenized US stocks."

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

Over the past six years, entrepreneurs have constantly attempted to bring stocks into the crypto world, but most have returned empty-handed.

However, six years ago, no one needed crypto US stocks. Six years later, everyone is seeking them.

Now, almost all mainstream 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 the New York Stock Exchange are doing it. Of course, we are no exception.

However, the products offered by different platforms vary greatly. Some are real stocks, while others are merely reflections of stock prices—prices are the same, but rights are completely different.

There are a few simple ways to determine whether the "US stocks" you bought on the crypto platform are truly stocks:

• Do you have dividend rights?
• Do you have voting rights?
• Which region's laws govern it?
• Can you transfer to traditional brokers like Interactive Brokers and Futu? (This feature is currently in testing)

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

Many platforms' so-called "stocks" have no dividend rights, no voting rights, are not governed by any legal regulations, and cannot be transferred. These are the typical characteristics of "fake stocks."

True stocks are legally protected and have complete rights. Backpack Securities holds a broker license and is regulated by New York State law; clearing and custody are completed by clearing broker RQD Clearing, ultimately connected to the DTCC system.

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

For tax purposes, according to the China-US tax treaty, residents of mainland China enjoy a preferential withholding tax rate of 10% on dividends (the standard rate is 30%), a benefit only available in a few countries like China and Japan.

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

This is what real stocks are supposed to look like.

True stocks are now, "fake stocks" are the future

True stocks certainly have significance. But fake stocks, or on-chain stocks—also have their value. I will point out two points.

First, fake stocks are likely to soon become true stocks.

Currently, the vast majority of tokenized stocks in the market use an SPV (Special Purpose Vehicle) structure: the SPV acts as the legal holder of the stock and then issues tokens to users representing rights. What users actually hold is the SPV's rights, not the stocks themselves.

From a strict legal definition, these assets are not truly stocks—existing securities legal frameworks do not support stocks existing completely outside traditional registration and clearing systems.

But this situation is changing. This second half of the year, DTCC will officially launch on-chain stocks. Once implemented, this will be the true on-chain stock protected by law (of course, it requires KYC). Backpack has officially joined the DTCC working group.

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

We are also creating the second type of stock—on-chain US stocks (tokenized stocks), which means US stocks in the SPV structure. These assets have many ways to play: leverage, arbitrage, borrowing, contracts, etc.

Backpack will not actively encourage users to do this in the short term, but once assets go on-chain, users can decide for themselves how to play, and we will not and cannot prohibit it.

We are collaborating with Solana and Sunrise to create application scenarios for on-chain tokenized assets. All tokenized stocks on Solana are minted and redeemed through Backpack. If you want to hold stocks with actual significance on Solana, you can only come to us.

Six years of changes

Six years of changes—tokenized stocks are no longer what they used to be.

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

Six years later, institutions like Binance, Bitget, Coinbase, Robinhood, Kraken, and even Nasdaq and the New York Stock Exchange are shifting their strategic focus to this sector. For the first time, the industry is starting to form a consensus: the crypto world needs its own stock market.

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

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

The global stock market is experiencing a surge due to the AI wave; SEC Chairman Paul Atkins publicly stated that tokenization is an unstoppable future trend; Hong Kong brokers like Futu and Tiger have begun to phase out mainland users, releasing huge latent demand... all of these have propelled the growth of "on-chain stocks."

In this process, we have established three major differentiated advantages.

First, transaction fees benchmarked against brokers. The rates on exchanges like Binance are set by themselves, while Backpack fully benchmarks traditional brokers—much lower than crypto exchanges.

Second, catering to two types of investors. We provide both real stocks (with dividends, voting rights, and transferability) for conservative investors to feel secure, and on-chain stocks for high-risk investors to freely participate in DeFi.

Third, by Q3 2026, users will be able to trade US stocks, Hong Kong stocks, Japanese stocks, Korean stocks, and European stocks simultaneously on Backpack—five countries and regions' stocks. Taiwanese stocks have also been performing well recently; we are also in discussions. This multi-market layout is something the vast majority of brokers and cryptocurrency platforms cannot achieve.

The biggest ceiling for crypto is being only crypto

After discussing products and advantages, I want to talk about our vision.

Over the past decade, the entire industry has been trading the same batch of assets: BTC, ETH, SOL, Meme, perpetual contracts… back and forth, essentially engaging in competition within a $30 trillion pool.

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

The truly large market has never been within crypto but outside of it.

Currently, the crypto industry represents less than 1% of the entire financial industry. What we want to do is participate in the process of growing from $30 trillion to $100 trillion.

Our vision is to become a truly 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 finance across more areas.

Over the past decade, crypto has been trying to create new assets. The more important task for crypto over the next decade may be to bring the world's largest asset market onto the blockchain.

And stocks are just the beginning.