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EU Regulator Warns Tokenized Stocks May Mislead Retail Investors
EU Regulator Warns Tokenized Stocks May Mislead Retail Investors
22
2
BTCCSquare news:
Tokenized stocks, digital assets designed to mirror the prices of traditional equities, are facing scrutiny from European regulators. Natasha Cazenave of the European Securities and Markets Authority (ESMA) warns these products often fail to confer actual shareholder rights—such as voting or dividends—creating potential for investor confusion.
The synthetic nature of tokenized stocks means holders merely track underlying share prices without ownership benefits. While platforms like Robinhood and Kraken expand offerings, the World Federation of Exchanges joins ESMA in calling for tighter oversight to prevent market fragmentation and hidden risks.
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