Tokenized equity still in regulatory grey zone — Attorneys
07.07.2025
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Tokenized stocks and private equity may face several legal challenges, as the emerging real-world asset (RWA) sits in a gray zone that does not grant holders the same legal rights as traditional asset owners, according to industry executives and attorneys.
Tokenized stocks and private equity are walking a tightrope in the legal world. These digital twins of traditional assets don’t pack the same punch when it comes to rights. No voting, no dividends, just a wild ride on the value rollercoaster.
It is crucial to understand that investors do not own actual shares; they hold tokens issued by intermediaries, which may entitle them to payouts if the underlying shares increase in value or are sold.
Translation: You’re not buying a piece of the pie, just a photo of it. And no, you can’t eat the photo.
The drama unfolded when Robinhood tried to sell OpenAI and SpaceX 'private equity' tokens in Europe. OpenAI was quick to shut that down, clarifying these tokens are not equity. Surprise, surprise.
Despite the confusion, tokenized equities are the new kids on the block, blending securities markets into one slick tech package. But without clear rules, it’s like the Wild West out here.
Crypto firms push for tokenized equities trading in the US to a receptive SEC
Robinhood isn’t alone in this game. Kraken and Bybit are already trading tokenized stocks, with over 60 companies up for grabs. And Coinbase? They’re knocking on the SEC’s door, asking nicely to join the party.
The SEC, under new leadership, seems to be warming up to the idea. 'Tokenization is an innovation,' says the chairman. Translation: We’re not saying no... yet.
#SEC#legislation#regulation#stock tokenization#tokenized stocks
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