Written by: ChandlerZ, Foresight News
Binance announced that it will launch Tesla (TSLA) perpetual contracts on January 28, supporting leverage up to 5x. The contracts track the price of Tesla common stock (NASDAQ: TSLA).
This marks Binance's first return to the US stock market with a clearly defined product form since shutting down its stock token service in July 2021. Behind this shift in product form lies yet another cautious yet ambitious attempt by the crypto giant to explore the boundaries of traditional finance, despite the high walls of compliance.
The short-lived experiment of "equity tokens"
In April 2021, Binance launched its first equity token, with Tesla as its underlying asset. The core narrative was to allow users to gain exposure to US stock price volatility with a lower barrier to entry and to achieve fragmented trading. At the time, equity tokens were described as tokens that tracked the price performance of traditional financial stocks and were backed by physical stocks.
According to Binance's announcement, the minimum trading size for Tesla equity tokens on Binance is 1% of the total token value. Each Tesla equity token on Binance represents one share of Tesla stock. Based on Tesla's then-current US stock price of $760, Binance investors could buy it at a minimum price of $7.60. The Tesla equity token trading pair "TSLA/BUSD" is denominated, settled, and staked in BUSD. Users must pass Level 2 KYC (Level 3 for German users), and trading is prohibited for users from China, the US, Turkey, and other countries.
At the time, Binance partnered with German financial company CM Equity AG and Swiss-based tokenization company Digital Assets AG to develop an equity token listing and trading service. Interestingly, in October 2020, FTX launched its US stock token trading service, again partnering with CM-Equity AG and Digital Assets AG.
Following Binance's launch of its equity token, regulators reacted swiftly and forcefully. The UK's Financial Conduct Authority (FCA) was the first to issue a report, with the Financial Times stating that the FCA had launched an investigation into the product's operational model and applicable regulations. Germany's financial regulator, BaFin, subsequently announced that it reasonably suspected Binance of violating securities laws. In the eyes of these regulators at the time, if an asset possesses the rights to income and dividends of stocks, then regardless of whether it is disguised as blockchain or called a "token," it is essentially a security and subject to the strictest securities laws.
In this regulatory crackdown, Binance had to compromise. On July 16, 2021, just three months after the product's launch, Binance announced it would stop supporting stock tokens, and in October of the same year, it completely shut down the business, which was seen as a painful defeat for DeFi in its head-on assault on TradeFi.
From the perspective of the intersection of business and compliance, the pressure at that time had typical characteristics. First, stock tokens span multiple stages, including securities issuance, brokerage and distribution, trading venues, and investor protection, making it difficult for a single platform to cover the requirements of different jurisdictions with the same set of licenses.
Secondly, investors are prone to imagining rights associated with the tokenization of stocks. If details such as voting rights, dividend rights, redemption mechanisms, and custody arrangements are not clearly defined, it can amplify disputes and enforcement risks. Thirdly, at the time, global regulators were sensitive to the expansion of the crypto industry; platforms that extended their reach into traditional financial assets often attracted greater regulatory attention.
Regulatory changes lead to the resumption of stock token business.
Five years later, the market has clearly changed dramatically. The total market capitalization of tokenized stocks has surpassed $1 billion, growing more than 50 times in the past year. Among them, xStock has a market capitalization of over $600 million, accounting for 58.3% of the market share. Ondo Global Markets' stock tokens on BNB Chain have grown rapidly, exceeding $50 million, and together with Ethereum, they account for 39% of the market share.
The New York Stock Exchange (NYSE) recently announced that it will seek regulatory approval to allow companies to issue securities in the form of digital tokens. Unlike the NYSE's traditional model of being open only on weekdays and closed at night, the new platform will offer 24/7 trading services. Furthermore, the platform will support instant settlement and allow investors to fund their trades using stablecoins pegged to the US dollar.
According to Barron's, in order to support the NYSE's ecosystem, Intercontinental Exchange (ICE) is partnering with banks including BNY Mellon and Citigroup to support its clearinghouse's tokenized deposit business.
Prior to this, with the Trump administration shifting towards a more favorable policy toward the crypto industry, TradFi was actively absorbing the technological advantages of DeFi.
Nasdaq filed an application with the U.S. Securities and Exchange Commission (SEC) as early as September 2025, seeking to allow investors to trade tokenized versions of their stocks. In the broader asset management sector, Depository Trust Company (DTC), a subsidiary of the American Depository Trust & Clearing Corporation (DTCC), has received a no-objection letter from the SEC approving its provision of real-world asset tokenization services in a controlled production environment. DTC expects to launch this service in the second half of 2026. JPMorgan Chase, Goldman Sachs, BNY Mellon, and State Street have all launched tokenized money market fund projects, allowing clients to hold digital tokens representing fund units.
Binance launched TSLA perpetual contracts, which, compared to stock tokens in the past, are closer to traditional derivatives exposure. For the platform, this approach still aims to bring TradeFi assets into the crypto market, but from a legal and compliance perspective, it makes it easier to discuss the product within the derivatives framework, reducing direct confrontation with sensitive issues such as securities issuance and sale.
Will this trigger a new round of market activity? The signal significance outweighs the changes in capital flows.
If we bring the issue back to the level of market trading, TSLA's perpetual nature is more like a signal. Crypto trading platforms are still looking for new growth opportunities by connecting with traditional assets, especially in the more familiar arena of derivatives. Secondly, the narrative of tokenized stocks has not died out in the industry and is being taken over by more compliant entities.
Ultimately, the market will award a premium, and whether the crypto market will develop independently due to Binance's return to the US stock market depends on whether funds treat it as a new risk vehicle and whether regulators allow this type of product to spread to more regions, more assets, and more leverage levels.
From an advantage perspective, these products can introduce the volatility of traditional assets and event-driven narratives into the crypto space, improving trading options and capital efficiency, and providing more collateralizable price anchors for on-chain balance sheets. From a risk perspective, the perpetual contract mechanism itself also brings basis, funding rates, and liquidation risks under extreme volatility. Traders also bear the compounded risks of the derivatives' microstructure.
