Crypto Exchanges Launch CXMT Derivatives to Bypass Regulations

Cryptocurrency exchanges have introduced financial instruments enabling foreign investors to invest in Chinese semiconductor firm ChangXin Memory Technologies (CXMT) by bypassing regulations that restrict access to the Chinese stock market, the Financial Times reported on the 25th (local time).

Cryptocurrency exchanges RateXYZ and Gate.io have launched perpetual futures (Perps) contracts tracking the share price of CXMT ahead of its listing on the Shanghai Stock Exchange's STAR Market (a market dedicated to science and technology stocks) scheduled for the 27th, the newspaper reported.

According to cryptocurrency derivatives data analytics firm Coinglass, the volume of CXMT perpetual futures contracts reached $19 million over the past 24 hours.

The surge in perpetual futures contracts, particularly those linked to equities, is increasingly blurring the boundaries between the lawless cryptocurrency market and institutional financial products.

Matthew Fisher, CEO of decentralized finance platform Katana, said, "We are moving beyond the tokenization of government bonds into real-time trading markets for assets such as foreign stocks and pre-IPO companies."

Perpetual futures, which began in the cryptocurrency market as a way to bet on the price movements of digital assets like Bitcoin without granting rights to the underlying asset or having an expiration date, have been expanding their targets to traditional assets such as equities.

Foreign investors can only invest in the Shanghai and Shenzhen stock markets through cross-trading mechanisms between mainland China and Hong Kong stock exchanges or the Qualified Foreign Institutional Investor (QFII) scheme.

Therefore, the equity-linked perpetual futures offered by cryptocurrency exchanges provide a means for foreign investors to bypass these regulations.

CXMT raised 57.92 billion yuan (approx. 12.5 trillion won) in its recent initial public offering (IPO).

Immediately after its listing on the 27th, CXMT's share price skyrocketed 476% from its IPO price of 8.66 yuan to hit 49.88 yuan.

In the case of the STAR Market, there are no limits on price fluctuations during the first five trading days after listing.

As of 9:36 AM on this day, CXMT's market capitalization stood at 3.14 trillion yuan (approx. 680 trillion won), surpassing the previous top-ranking Industrial and Commercial Bank of China (ICBC), which had a market cap of 2.75 trillion yuan (approx. 596 trillion won).

(Photo provided by CXMT, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.