Global exchange alliance issues urgent warning on the risks of tokenized stocks! Coinbase and Robinhood face regulatory scrutiny as billions in funds exit the crypto market.

The World Federation of Exchanges (WFE) has formally issued a warning to regulatory bodies such as the SEC and ESMA, demanding strict regulation of tokenized stock trading. The organization pointed out that while these products mimic stocks, they do not provide equivalent shareholder rights and pose significant investment risks. Meanwhile, global capital continues to flow out of the Crypto Assets market, with a net outflow of $700 million from crypto funds last week, while bond funds saw a massive inflow of $23 billion during the same period.

1. Regulatory Alert: Global Exchange Alliance Targets Tokenization of Stocks The World Federation of Exchanges (WFE) recently sent a joint letter to the U.S. SEC's crypto working group, the European Securities and Markets Authority, and the International Organization of Securities Commissions' fintech working group, requesting strict regulation of so-called "tokenized stocks." This industry organization, representing the largest securities exchanges globally, warns that these blockchain-based tokens, while mimicking stocks, do not provide equivalent shareholder rights and lack traditional trading safeguards.

II. Product Risk Analysis: Why is Tokenization of Stocks Suspected of Violating Regulations? Tokenized stocks are blockchain tokens issued by crypto exchanges, claiming to represent equity in publicly listed companies, but investors do not actually become registered shareholders of the underlying companies. WFE CEO Nandini Sukumar explicitly stated: "These products are marketed as stock tokens or equivalents, but they are not in substance." The main risks include:

1. Investors cannot obtain core shareholder rights such as dividend distribution and voting rights.
2. Lack of transparency and regulatory protection of traditional securities exchanges
3. The issuing company of the underlying asset may encounter reputational risks due to token issues.

III. Industry Giants' Layout: Compliance Challenges of Coinbase and Robinhood Despite facing regulatory pressures, major exchanges are still actively advancing.

• Robinhood: Launched tokenized stock trading for EU users in June.
• Coinbase: According to Reuters, it is seeking SEC approval to launch similar services in the US. Although WFE did not directly name specific platforms, it clearly expressed concerns about the operational plans of "numerous brokers and crypto trading platforms."

4. Major Changes in Fund Flow: Bond Market Attracts $23 Billion, Crypto Assets Are Sold Off The latest fund flow report from Bank of America shows (as of the week ending August 23):

• Global bond funds net inflow of $23 billion, attracting capital for 17 consecutive weeks.
• In the past four weeks, total bond inflows reached a record $97 billion.
• Investment-grade bonds saw an inflow of $12.7 billion in a single week.
• Crypto Assets net outflow of 700 million USD, becoming the worst-performing asset class.

5. Stock Market Divergence: Technology Sector Shines, Funds Fleeing from Multiple Regions Although stock funds have an overall inflow of 3 billion USD, there is significant differentiation:

• European stock funds saw an outflow of $2.3 billion (the largest outflow in 4 months)
• 2.5 billion USD flowed out of US stock funds
• Japanese stock funds have seen outflows for 6 consecutive weeks (this week $2.2 billion) Only the technology sector (+500 million USD) and healthcare sector (+400 million USD) received funding favor.

6. In-depth Comparison: Value Logic and Regulatory Outlook of Tokenized Stocks vs Bitcoin

1. Essential Differences in Legal Attributes
   • Tokenization of stocks: Still falls under the category of securities and is subject to traditional securities laws.
   • Bitcoin: Recognized as a commodity or digital asset, the regulatory framework is still under development.
2. Underlying Value Support
   • Tokenization of stocks: relies on the performance of the underlying stocks and the credit of the issuer
   • Bitcoin: Its value comes from the network effect and scarcity algorithm.
3. Regulatory Risk Level
   • Tokenization of stocks: Facing the risk of direct regulatory crackdown from the SEC
   • Bitcoin: Has undergone multiple rounds of regulatory tests, demonstrating relatively strong resilience.
4. Market Liquidity Structure
   • Tokenization of stocks: relies on a single issuer's market-making mechanism
   • Bitcoin: Global multi-exchange depth liquidity pool

VII. Regulatory Trend Forecast: Three Major Development Directions Based on the current regulatory dynamics, tokenized assets may face the following development paths:

1. Strict Compliance Requirements: Must adhere to the same information disclosure and investor protection regulations as traditional securities.
2. Trading Restrictions: May prohibit promoting sales to retail investors.
3. Cross-Border Regulatory Coordination: IOSCO is developing globally unified regulatory standards for Crypto Assets.

[Conclusion] Tokenization of stocks is facing strong resistance from the traditional financial system, and the joint protest of global exchange alliances indicates that such products will face stricter regulatory scrutiny. For investors, it is essential to fully understand the legal risks and rights limitations before participating in such innovative products. It is recommended to prioritize traditional investment channels that are subject to comprehensive regulation. For crypto-native investors, decentralized assets like Bitcoin still provide a relatively clear regulatory positioning and investment protection framework.