Global Exchanges Warn of Risks Posed by Tokenized Stocks
The World Federation of Exchanges (WFE), representing the world's largest stock exchanges, has warned regulators about the risks of so-called tokenized stocks. These blockchain-based tokens mimic equities but lack the same rights and safeguards, potentially harming market integrity. The WFE, in a letter to the SEC, ESMA, and IOSCO, highlighted platforms like Coinbase and Robinhood's foray into this nascent sector, emphasizing that these 'tokenized stocks' are not equivalent to actual shares. The WFE urged regulators to apply securities rules to these assets, clarify legal frameworks, and prevent misleading marketing, citing potential investor losses and reputational damage to issuing companies.
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