Cryptocurrency exchange Bybit has introduced a tokenized product offering access to the initial public offering (IPO) of SpaceX, targeting its VIP and Pro users. This move follows a similar launch by rival exchange Kraken and utilizes the xStocks framework, originally developed by Backed Finance and later acquired by Kraken’s parent company, Payward. The product, named IPO Express, allows eligible users to commit USDC for access to SpaceX shares at an indicative price of $135, plus a 5% underwriting fee.
Key Takeaways
- Bybit has launched a tokenized product providing access to the SpaceX IPO for select users.
- The offering is built on the xStocks framework, a tokenized equity solution.
- Funds are held in USDC and are subject to allocation based on demand and the final IPO price.
- This product offers economic exposure to SpaceX shares but does not grant direct equity ownership or voting rights.
- Bybit’s offering excludes participants from the European Economic Area, while Kraken’s similar product is available in the EEA.
The subscription window for Bybit’s IPO Express opened on Sunday and will close on Thursday, ahead of SpaceX’s anticipated Nasdaq debut on June 12. The offering is structured as a four-day commitment period for users to allocate USDC. The indicative price is set at 135 USDC per share, with an additional 5% underwriting fee, a minimum subscription of 100 USDC, and a limit of 50 subscription orders per user. Funds committed by users will be held pending allocation, which may be partial or subject to cancellation based on overall demand. If the final IPO price deviates by more than 20% from the indicative price, users will be required to reconfirm their participation within a specified timeframe.
This initiative marks the second instance of a major crypto exchange leveraging the xStocks Alliance, a network managed by Payward Services, to offer tokenized access to a significant pre-IPO event. Kraken initiated its version, trading under the ticker SPCXx, on June 5, making it available to verified users in over 110 jurisdictions. The xStocks tokens themselves are issued by Backed Assets (JE) Limited, a Jersey-based entity. These tokens function as tracker certificates, providing economic exposure to the underlying asset without conferring direct shareholder rights such as voting or dividends. The xStocks platform is designed to be blockchain-agnostic, supporting interoperability across various networks including Ethereum, Solana, and TON.
Bybit has characterized its SpaceX tokens as being “backed 1:1 by real equity held in regulated broker-dealer custody,” with CEO Ben Zhou emphasizing the product’s compliance and security. However, the product’s terms also note that the collateral “may not always consist of the underlying shares” and that “other eligible assets (including cash collateral) may be used as substitute collateral.” Bybit has stated it does not independently verify the collateral’s composition or its continuous 1:1 backing. Bybit did not immediately provide further comment when contacted.
Emily Bao, head of spot at Bybit, stated that the partnership with xStocks enables Bybit customers globally to invest in U.S.-listed IPOs alongside their cryptocurrency holdings, on par with institutional investors.
Regulatory Implications and Precedent
The introduction of tokenized equity products like those offered by Bybit and Kraken raises significant legal and regulatory questions. Unlike traditional derivatives or synthetic perpetual futures, these products are presented as offering direct economic exposure to shares, albeit through complex securitization structures. The primary legal stakes for the companies involved revolve around compliance with securities laws in multiple jurisdictions. For instance, the provision of such financial instruments to retail investors often requires registration or specific exemptions under securities regulations.
The xStocks framework, structured as tracker certificates or debt instruments backed by shares held in custody, aims to navigate these regulatory hurdles. However, statements from Bybit indicate a degree of flexibility regarding the exact nature of the collateral, which could attract scrutiny from regulators concerned about consumer protection and the integrity of the underlying asset backing. The exclusion of the European Economic Area (EEA) from Bybit’s offering, while Kraken’s product is available there via a Cyprus-licensed subsidiary, highlights the fragmented and complex nature of cross-border crypto and traditional finance integration.
The legal precedent set by these offerings could influence how tokenized traditional assets are regulated globally. Regulators are keenly observing the development of these products, particularly in light of past issues with similar tokenized pre-IPO products linked to companies like Anthropic and OpenAI, which faced challenges when corporate bylaws restricted share transfers. The distinction between direct equity ownership and economic exposure, and the transparency surrounding collateralization, will likely be critical factors for regulatory bodies like the U.S. Securities and Exchange Commission (SEC) and European authorities such as those under the Markets in Crypto-Asset (MiCA) regulation.
The approach contrasts with the synthetic pre-IPO perpetual futures offered by other exchanges like Coinbase, Binance, and OKX. These perpetual futures are typically structured as derivative contracts and are subject to different regulatory frameworks. The failure of some pre-IPO perpetual contracts due to oracle issues, as seen with Ventuals, underscores the inherent risks in these novel financial products, regardless of their underlying structure.
SpaceX’s IPO, reportedly led by a syndicate of 23 banks and targeting a valuation of $1.75 trillion, represents a significant event in the financial markets. The involvement of crypto exchanges in facilitating access to such high-profile IPOs suggests a growing convergence between traditional finance and the digital asset space. However, this convergence brings heightened regulatory scrutiny, demanding robust compliance frameworks to ensure market integrity and investor protection.
Source: : www.theblock.co