WFE sounds alarm on tokenised equities
The World Federation of Exchanges (WFE) has warned that tokenised stocks pose significant risks to investors and exchanges. In a letter sent to major regulators, WFE argued that these blockchain-based assets mimic real securities but fail to provide equivalent protections.
The group cautioned that if tokenised stocks collapse, global exchanges could face reputational harm. Regulators, including the U.S. Securities and Exchange Commission’s Crypto Task Force, the European Securities and Markets Authority, and IOSCO’s Fintech Task Force, received the letter on Friday.
“Not equivalent to real stocks”
“We are alarmed at the plethora of brokers and crypto-trading platforms offering or intending to offer so-called tokenised U.S. stocks,” the WFE said. “These products are marketed as stock tokens or the equivalent to stocks when they are not.”
Tokenised shares represent exposure to a stock’s value but lack shareholder rights such as voting, dividends, and custody protections. In many cases, holders cannot redeem their tokens for actual shares, leaving resale on the issuing platform as the only option.
Platforms offering tokenised shares
Companies including Robinhood, Coinbase, Kraken, Gemini, and eToro offer products tied to tokenised stocks. Platforms typically mark them with unique tickers, such as COINx for Coinbase on Kraken, and disclaim that ownership does not include shareholder privileges.
While some platforms stress the differences, WFE argues that the marketing still risks misleading investors. The federation urged regulators to act before these products expand further into mainstream markets.WFE sounds alarm on tokenised equities
The World Federation of Exchanges (WFE) has warned that tokenised stocks pose significant risks to investors and exchanges. In a letter sent to major regulators, WFE argued that these blockchain-based assets mimic real securities but fail to provide equivalent protections.
The group cautioned that if tokenised stocks collapse, global exchanges could face reputational harm. Regulators, including the U.S. Securities and Exchange Commission’s Crypto Task Force, the European Securities and Markets Authority, and IOSCO’s Fintech Task Force, received the letter on Friday.
“Not equivalent to real stocks”
“We are alarmed at the plethora of brokers and crypto-trading platforms offering or intending to offer so-called tokenised U.S. stocks,” the WFE said. “These products are marketed as stock tokens or the equivalent to stocks when they are not.”
Tokenised shares represent exposure to a stock’s value but lack shareholder rights such as voting, dividends, and custody protections. In many cases, holders cannot redeem their tokens for actual shares, leaving resale on the issuing platform as the only option.
Platforms offering tokenised shares
Companies including Robinhood, Coinbase, Kraken, Gemini, and eToro offer products tied to tokenised stocks. Platforms typically mark them with unique tickers, such as COINx for Coinbase on Kraken, and disclaim that ownership does not include shareholder privileges.
While some platforms stress the differences, WFE argues that the marketing still risks misleading investors. The federation urged regulators to act before these products expand further into mainstream markets.
