According to a report in The Wall Street Journal on June 12, Citigroup is rolling out a blockchain-based private company stock trading platform. The platform will use tokenized custody receipts (issued by Citigroup) to represent ownership equity in private companies, providing a channel for pre-IPO investment in private companies for affluent investors and institutional investors. Compared with special purpose vehicles (SPVs), it offers a more transparent alternative.
Platform-confirmed technical architecture and opening arrangements
According to The Wall Street Journal report, the confirmed details of Citigroup’s platform are as follows:
Token type: tokenized custody receipts issued by Citigroup, representing ownership equity in private companies
Underlying infrastructure: operated by SIX Digital Exchange (a subsidiary under the SIX Group; SIX Group is the operator of the Swiss stock exchange)
Opening order: initially open to foreign investors; U.S. investors plan to join later
Deal progress: Citigroup said it has been in talks with multiple large private companies, aiming to list their shares on the platform
Confirmed differences between tokenized custody receipts and SPVs
Citigroup said that by constructing private placements through tokenized custody receipts, it provides a more transparent alternative compared with special purpose vehicles (SPVs). While SPVs have become a commonly used tool for investors to invest in private enterprises, they often lack transparency.
The article also cites relevant background: fintech platforms such as Robinhood had previously explored tokenized investment opportunities in private companies such as OpenAI. However, these products typically provide indirect economic exposure rather than legal ownership of the underlying shares. OpenAI previously publicly reminded investors that these tokenized stocks do not represent company equity.
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FAQ
How does Citigroup’s tokenized custody receipts differ from directly holding private company stocks?
According to the report, tokenized custody receipts represent ownership equity in private companies. Citigroup positions it as a more transparent alternative to SPVs. Specific full details of the legal ownership structure have not been disclosed in publicly reported coverage.
When can foreign investors use the platform, and what is the timeline for U.S. investors?
According to The Wall Street Journal report, the platform will initially be open to foreign investors, while U.S. investors plan to join later. The specific opening timeline has not been announced.
Did OpenAI’s earlier warning about tokenized stocks affect the legality of Citigroup’s platform?
According to the report, OpenAI’s warning was aimed at indirect economic exposure products offered by platforms such as Robinhood, and those products do not represent company equity. Citigroup clearly positioned its product as tokenized custody receipts providing actual ownership equity. Its specific legal structure differs from the products that were previously warned about by OpenAI.
