Global stock exchanges call for crackdown on tokenized stocks

The coalition warns of mimicking equities without safeguards and could harm market integrity

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This article was generated with the assistance of AI and reviewed by editor Jeffrey Albus before publication.


A coalition of the world’s leading stock exchanges has urged regulators to crack down on tokenized stocks, warning that blockchain-based assets could threaten investor protection and market stability.

In a letter sent on August 22 to the U.S. Securities and Exchange Commission’s Crypto Task Force, the European Securities and Markets Authority, and the International Organization of Securities Commissions’ Fintech Task Force, the World Federation of Exchanges (WFE) said tokenized equities mimic shares without conferring legal ownership or shareholder rights.

Reuters, which reviewed the letter, reported that the WFE described the tokens as imitations of listed equities that could mislead investors and expose issuing companies to reputational fallout if the products collapse. The trade group said some issuers have already voiced concerns about their shares being replicated without consent.

Tokenized equities allow investors to buy digital tokens that track the value of a company’s shares, but unlike traditional stockholders, token buyers do not gain voting rights or protections under securities law.

As Jamie Alcock argued in the Financial Times earlier this month, these instruments provide only “synthetic exposure” to underlying assets rather than enforceable ownership. Proponents argue the tokens could lower trading costs and enable around-the-clock markets, but regulators have repeatedly stressed that securities laws still apply.

Platforms such as Robinhood and Coinbase have begun experimenting with these offerings, with Robinhood launching tokenized equities for European customers earlier this year and Coinbase seeking U.S. regulatory approval.


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