Crypto race to tokenize stocks raises investor protection flags

The rush by crypto companies to tokenize stocks raises investor protection concerns, alarming traditional financial firms and experts about potential risks to market stability and investor safety.

• Crypto companies are rapidly launching tokens pegged to stocks, a trend that has garnered attention from traditional financial firms and regulators wary of its implications.
• Regulatory experts warn that these novel products could jeopardize market liquidity and investor protections, reminiscent of past financial crises.
• The surge in interest follows regulatory changes and events, including actions by Robinhood Markets and significant influences from figures like Donald Trump.