EU regulators warn: Tokenized stocks may mislead investors! Lack of shareholder rights is the biggest risk.

The European Securities and Markets Authority (ESMA) has recently warned that while tokenized stocks can track the share prices of listed companies and provide around-the-clock trading, they often do not grant holders traditional shareholder rights, such as voting rights and dividend distribution. Regulators are concerned that this difference may mislead investors and are calling for enhanced transparency and protective measures.

ESMA: Investors May Overestimate Tokenized Equity

ESMA Executive Director Natasha Cazenave stated that although tokenized stocks have attracted more investor participation, particularly because they support fractional ownership and 24/7 trading, these assets have significant differences from traditional stocks at the equity level.

"Many tokenized stocks do not confer voting rights or dividend rights, which creates a gap in investors' understanding of traditional equity." She emphasized the need for clear communication and institutional safeguards to prevent investors from being misled about their rights and risks.

Industry and Regulatory Calls: Strengthening Regulations is Urgent

The World Federation of Exchanges (WFE) echoes the concerns of ESMA and urges national securities regulators to implement stricter regulations on tokenized stocks to reduce investment risks and maintain market integrity.

Although the crypto community generally believes that tokenization has the potential to reshape the financial markets, the ESMA points out that most tokenization projects currently have limited scale and insufficient liquidity, and have not yet reached the stability standards of a mature market.

Data shows market enthusiasm surges

According to the CEX report, the market value of tokenized stocks (Tesla TSLA and SPDR S&P 500 ETF SPY) reached $53.6 million in July 2025, a surge of 220% compared to June.

On-chain address count: surged from about 1,600 to over 90,000 within a month.

Trading volume structure: The trading volume of centralized exchanges is 70 times that of on-chain platforms, indicating that demand far exceeds the scale reflected by on-chain activities.

Regulatory Dialogue: CEX and SEC Engagement

A large CEX recently met with the U.S. Securities and Exchange Commission (SEC) cryptocurrency working group to discuss a tokenization trading system for stocks and other assets. The meeting was attended by representatives from the law firm WilmerHale, with a focus on:

1. System Technical Architecture

2. Applicable regulatory requirements

3. Potential Impact and Benefits to the Market

Conclusion

As the tokenization of the stock market grows rapidly, the game between regulators and industry participants will become more intense. ESMA's warning highlights the importance of investor protection and market transparency, and reminds investors that when pursuing innovative financial products, they must clearly understand the differences between their rights and risks. In the future, the development of tokenized financial instruments will depend on whether the regulatory framework and market education can keep pace with each other.