FinCEN MSB is just a ticket to get on board, what licenses are needed for a compliant US stock Token trading platform?

Author: Golem (@web 3_golem)

This year, with the Trump administration loosening cryptocurrency regulations, there has been substantial progress in the securities tokenization sector, and U.S. stock token trading platforms have emerged like mushrooms after rain. However, learning from the previous experiences of centralized exchanges in the crypto space, almost all U.S. stock token trading platforms realized the importance of compliance early on when they were established and regarded it as a core competitive advantage. Particularly, due to the recent MyStonks "$6.2 million" public relations incident involving regulation (related reading: $6.2 million withdrawal blocked? MyStonks responds directly: due to regulatory enforcement, not platform misappropriation), the market has once again sparked discussions about the compliance of U.S. stock token trading platforms.

So, what licenses are needed to establish a compliant US stock token trading platform? The vast majority of US stock token trading platforms in the market operate on an order flow model, meaning that users buy and sell US stock tokens on the platform, and the platform trades the corresponding shares 1:1 through US stock accounts off-chain, while choosing to collaborate with licensed traditional banks or brokers to custody user assets. Therefore, essentially, US stock token trading platforms are engaged in securities brokerage/broker business.

According to the statement released by the SEC on July 9, 2025, regarding the tokenization of securities, tokenized securities are still considered securities, and market participants must consider and comply with federal securities laws when conducting these transactions. This means that while there are still ambiguities in the regulation of token trading platforms for US stocks, from the perspective of business similarity, referencing the compliance requirements of traditional broker-dealers is very instructive for token trading platforms for US stocks. For instance, Dinari, a compliant token trading platform for US stocks in the US, has applied for regulatory compliance according to the requirements of traditional broker-dealers. It is registered as a transfer agent for securities under SEC Rule 17 A(c) and has obtained registration as a US securities broker-dealer.

However, in actual business scenarios, whether to provide services to U.S. users, whether to facilitate market-making/trading, whether to provide fiat currency deposits and withdrawals, and whether to personally hold/manage actual stocks all have different licensing requirements for U.S. stock token trading platforms. Odaily Planet Daily will reference the compliance requirements for traditional brokers in the U.S. in this article to discuss what licenses a compliant U.S. stock token trading platform may need. (Note: This article is intended for general discussion only and should not be considered as formal compliance reference or legal advice for enterprises.)

FinCEN MSB (Money Services Business) registration (must have)

FinCEN, short for the Financial Crimes Enforcement Network, is an agency of the U.S. Department of the Treasury, primarily responsible for enforcing anti-money laundering (AML) and counter-terrorism financing (CFT) regulations, and overseeing "money services businesses" (MSB), including virtual currencies.

FinCEN, in its interpretation published in 2019, defined "convertible virtual currency (CVC)" as "a virtual currency that can be exchanged for fiat currency or can be used as a substitute for fiat currency," and pointed out that the "exchangers/issuers/administers" who accept, transmit, or buy and sell CVC must register with FinCEN as MSBs and fulfill AML/CFT reporting and record-keeping obligations.

For compliant US stock token trading platforms, this is almost a must-have license. Because even though most US stock token trading platforms do not directly involve USD deposits and withdrawals, their business is fundamentally based on receiving and transferring stablecoins pegged to the USD, which aligns with FinCEN's definition of CVC, thus falling under FinCEN regulation.

ATS (Alternative Trading System) license (exists ambiguously)

The full name of the ATS license is Alternative Trading System license, which is granted by the US SEC and allows the licensee to operate a trading platform that is not part of traditional securities exchanges but can still facilitate the buying and selling of securities. Generally speaking, digital asset trading platforms do not require this license, as digital assets are mostly recognized as commodities; however, tokenized US stocks are still considered securities, thus falling under the regulatory purview of the US SEC.

To apply for an ATS license, one must first register with the SEC as a broker-dealer, and then apply for membership with FINRA before submitting the Form ATS application to the SEC. After submitting the application, it is necessary to continuously report operational data to the SEC and comply with relevant trading transparency and anti-money laundering regulations.

However, the SEC's requirement for an ATS license is that the platform operates a securities matching trading system. The reality is that most US stock token trading platforms do not facilitate buy and sell transactions from multiple parties, but instead use an order flow model, trading one-on-one with users, and therefore are not currently within the ATS scope. However, since it still involves securities trading, the platform must still obtain a broker-dealer license.

Become a FINRA/SIPC member (recommended to take)

FINRA (Financial Industry Regulatory Authority) is a self-regulatory organization for the securities industry in the United States (a non-governmental entity but supervised by the SEC). It is responsible for regulating brokerage firms and registered brokers, establishing and enforcing industry rules, conducting audits, assessing licenses, handling industry discipline and investor complaints, and operating BrokerCheck (a tool to check the background of brokers/brokerage firms).

In the United States, broker-dealers involved in the buying and selling of securities must be registered and, in most cases, become members of FINRA, which is responsible for daily regulation, business rules, anti-money laundering, compliance systems, etc. As a token trading platform for U.S. stocks, it should also join FINRA as a member for compliance, as it acts as a quasi-broker and provides securities brokerage services.

The SIPC (Securities Investor Protection Corporation) is a non-profit organization established by Congress and serves as a mechanism for investor protection. When a SIPC member brokerage firm goes bankrupt and a customer's cash or securities are misappropriated or lost, the SIPC can help recover customer assets or provide cash/securities compensation. Joining the SIPC is not a legal requirement but has become the industry norm; however, the premise is that the platform must register as a broker-dealer, and most publicly registered broker-dealers in the United States are SIPC members.

Although the SIPC does not explicitly state the protection of tokenized assets, given that U.S. stock tokens are essentially securities, the obligation to protect clients may still be triggered, and compliant U.S. stock token trading platforms should become SIPC members.

Transfer Agent Registration (Not Required)

A Transfer Agent is regulated by the SEC and is primarily responsible for securities registration, transfer, and maintenance of shareholder registries. When investors buy and sell stocks, the Transfer Agent updates the shareholder records to ensure that shares are transferred from the seller to the buyer. They also handle events such as dividend distributions, rights offerings, and stock splits. Traditional financial brokers and dealers generally apply for a Transfer Agent.

The US stock token trading platform can also apply to register a transfer agent, such as Dinari, which successfully applied for this license. However, in general, most US stock token trading platforms prefer to cooperate with brokers or banks that already have licenses, rather than applying for a transfer agent themselves.

However, it is worth noting that some US stock token trading platforms offer a dividend distribution function for users holding tokens on the platform, which involves recording the ownership relationship of shareholders. To comply, it is necessary to register a transfer agent with the platform or establish a detailed cooperation plan with an entrusted transfer agent. For example, Dinari distributes dividends to US stock token holders in the form of USD+ stablecoins issued on Arbitrum One.

CFTC (Commodity Futures Trading Commission) related registration (derivatives business must obtain)

If a trading platform for US stock tokens involves contracts or leverage trading for US stock tokens, it must also register with the CFTC (Commodity Futures Trading Commission). Because US stock tokens are essentially still securities, deriving contracts or leverage trading based on them will fall under the CFTC's derivatives regulatory scope.

If handling futures/derivatives trading for users and collecting margin requires FCM (Futures Commission Merchant) registration; if the platform's derivatives trading involves foreign exchange, then RFED (Retail Foreign Exchange Dealer) registration is required; if the platform includes a matching system and introduces clients to the derivatives market, then Introducing Broker (IB) registration is necessary.

In addition to this, platforms offering US stock token derivatives trading must also comply with the rules of the NFA (National Futures Association).

Not providing services to US users, compliance difficulty reduced by half.

In summary, it is not easy to become a compliant U.S. stock token trading platform, and obtaining a single or a few licenses does not mean "fully compliant." But why are there U.S. stock trading platforms in the market claiming to be compliant? Or is there another standard of compliance?

The answer is yes. In fact, as long as you persist in not providing services to U.S. users, the compliance difficulty will be significantly reduced. As long as the U.S. stock token trading platform does not provide services to U.S. users, theoretically, ATS licenses, FINRA/SIPC, transfer agents, and CFTC registration are all unnecessary. There are also many U.S. stock token trading platforms on the market that use KYC to verify identities, IP blocking, and other restrictions to prevent Americans and U.S. regions from accessing their services, thus achieving the requirement of not providing services to U.S. users and circumventing the cumbersome regulatory procedures in the U.S.

For a US stock token trading platform targeting the global market, restricting access for Americans and regions in the US will not have a significant impact on its business. However, it is important to note that the US, as the "world police," has a strong "long-arm jurisdiction" from the SEC and CFTC. If US users bypass KYC or IP restrictions through VPNs, proxies, or third-party channels, it will still trigger compliance regulatory requirements from the SEC and CFTC.

Such examples have occurred many times in CEX, and many exchanges that claimed to exit the US market have still faced lawsuits from the US SEC/CFTC. Therefore, for cryptocurrency trading platforms dealing with US stocks, even if the current target is non-US users, it is essential to prepare in advance to avoid falling into the "regulatory trap" of the US SEC/CFTC.