Tokenized Stocks May Mislead Investors, Says EU Watchdog

Crypto tokens tied to the value of stocks could mislead investors as they don’t usually give holders the same rights as a direct shareholder, says the European Union’s markets regulator.

Several companies have tokenized stocks and derivatives that are backed by the shares they represent held in a special purpose company, European Securities and Markets Authority (ESMA) executive director Natasha Cazenave said at a conference in Dubrovnik, Croatia on Monday.

“These tokenized instruments can provide always-on access and fractionalisation but…