DX.Exchange — Tokenized Stocks, A security token or a fraud?

How does DX.Exchange work?

MPS Market Place Securities, LTD (based in Cyprus):

  • Purchase stocks from traditional exchanges (ex. NASDAQ, SEHK)
  • Hold the acquired stocks and issues ERC20 tokens backed by the real-world stocks (1:1 Ratio)

DX.Exchange

  • Tokenized stocks are listed on the exchange and are offered to trade
  • Partnered with MPS to offer MPS’s stock-backed tokens

Fact Check — DX.Exchange

  1. Tokenized stocks represent the ownership of the real-world stock?
Source: DX.Exchange White paper
  • Tokenized stocks in DX Exchange hold a similar form as Crypto Depository Receipts (CDR). Yet, despite being backed 1:1 by the real-world stocks, they do not represent the real-world stocks and are not entitled to any power that stocks offer. Users in DX Exchange are NOT purchasing the ownership of the company’s stock, instead the ownership of a token issued by MPS.
  • DX Exchange markets themselves as a NASDAQ backed exchange as if they have made a direct agreement with NASDAQ. However, DX Exchange only uses NASDAQ’s Exchange Matching Engine that is used in over 70 markets already. Beyond this, they do not have any further connection with NASDAQ.
  • DX Exchange also claims they’re under MiFID II license. DXE has two regional licenses which comply to the MiFID II directive. But it’s not THE license itself.
Source: DX.Exchange White paper
Official Korean DX.Exchange Community — Link

SpotOption, the Company behind DX.Exchange?

Source: CySEC

Conclusion

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