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Hongji Feng
Author
Hongji Feng
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Key Takeaways:
- Republic will sell tokens linked to the performance of SpaceX private shares.
- Tokens do not confer ownership or financial disclosures.
- Investors can participate with as little as $50, capped at $5,000.
Investment platform Republic will begin selling digital tokens that mirror the performance of SpaceX’s private shares, according to a report published on June 25.
The tokens will not confer ownership or shareholder rights but are structured to track the value of the underlying stock. Republic said the offering will not require permission from the companies whose shares are being mirrored, as the tokens will represent securities issued by Republic itself.
Track SpaceX Stock from $50
According to Republic CEO Kendrick Nguyen, this structure would comply with current securities rules, but regulators could still take a different view.
The company is relying on a provision in the 2012 JOBS Act that allows private issuers to raise up to $5 million annually from retail investors.
Republic holds the necessary license under Regulation Crowdfunding and says the tokens will be priced according to secondary market valuations of SpaceX shares.
Each token represents a contractual right to the value difference between Republic’s purchase price and the eventual sale or IPO price of the private company shares. Republic stated that it will hold or otherwise maintain exposure to the underlying equity.
Investors can buy as little as $50 worth of tokens, with a cap of $5,000 per person. Republic says tokens can be traded on INX, an alternative trading system it is in the process of acquiring, after a one-year lockup period.
Legal questions remain around the lack of access to financial disclosures and the absence of shareholder recognition. Republic contends that the tokens are structured as investment contracts and do not require corporate cooperation.
Tokenization Raises Questions Over Investor Rights and Oversight
Tokenization of private equity has drawn past scrutiny. Binance suspended similar offerings in 2021 following regulatory pressure over tokenized Tesla shares. Republic said its current model differs due to compliance with U.S. crowdfunding exemptions.
Unlike traditional equity, these tokens create financial claims without formal shareholder status or access to company records. This distinction may challenge existing frameworks for investor protections.
Regulators will need to address how these offerings interact with disclosure rules, secondary trading restrictions, and corporate governance standards. The outcome could shape how private market access is structured across retail-facing digital finance.
Frequently Asked Questions (FAQs)
Binance offered synthetic exposure without regulatory exemptions. Republic operates under Regulation Crowdfunding with SEC registration and caps on fundraising.
Republic says it plans to offer similar products tied to companies like OpenAI and Anthropic, potentially extending the model to other high-profile private firms.
Trading depends on INX’s regulatory and operational readiness. If delayed, secondary market access could be restricted beyond the one-year lockup.
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