Crypto Startup Aims to Tokenize Stocks by Playing by the Rules

For years, cryptocurrency startups have tried to replicate parts of the US stock market on the blockchain for use by digital-asset investors around the world, often without worrying too much about getting approval from regulators first.

The latest project, however, is an attempt to turn equities into crypto tokens in a way that won’t run afoul of securities laws, and it has scored the backing of one of Wall Street’s most well-known trading firms. Susquehanna International Group joined former Coinbase Global inc. executive Balaji Srinivasan and other investors in funding the company called Dinari, based in Los Altos, California.

The ...