TLDR
- Crypto firms are rapidly launching stock-linked tokens to attract retail investors.
- These tokens often lack fundamental ownership rights and operate more like synthetic derivatives.
- Regulators and Wall Street institutions are warning of legal gaps and potential market risks.
- Some firms like Dinari and Ondo Finance claim real stocks fully back their tokens.
- Robinhood faced backlash after listing a token tied to OpenAI without authorization.
A wave of Crypto Firms is launching stock-linked tokens, triggering urgent scrutiny from regulators and traditional financial institutions. These blockchain-based products offer exposure to real-world equities without providing ownership rights or legal safeguards. As the tokenization market rapidly grows, legal clarity and investor protection remain unresolved challenges.
Robinhood, Gemini, and Kraken Expand Token Offerings
Crypto Firms like Robinhood, Gemini, and Kraken are pushing into tokenized stock markets to tap growing retail interest. They have rolled out synthetic and backed tokens across Europe, offering exposure to major stocks through blockchain platforms. Meanwhile, Coinbase and startup Dinari seek regulatory approval for similar products in the United States.
The move aligns with former President Donald Trump‘s crypto-friendly rhetoric, which has energized firms and investors alike. Analysts view this trend as a strategic effort to combine traditional equities with the speed and accessibility of blockchain technology. As a result, markets now trade these instruments 24/7, unlike conventional exchanges.
Dinari and Ondo Finance claim to back their tokens 1:1 with underlying assets, increasing trust among some users. However, other Crypto Firms only replicate price exposure, further complicating investor understanding and legal certainty. Robinhood’s recent listing of a token tied to OpenAI drew criticism due to a lack of authorization.
TVL of real-world assets is up 2X since January. 20X since 2023.
Currently it sits at $16.894 billion. This is what parabolic adoption looks like.
The total addressable market sits in the trillions. Tokenization is simply a superior way to store and transfer assets:
— Patrick Scott | Dynamo DeFi (@patfscott) October 7, 2025
Wall Street and Regulators Raise Legal Concerns
Traditional financial giants and global regulators are raising red flags about the unregulated trading of stock-linked tokens. Citadel Securities and others warn that such instruments may drain liquidity from public markets and disrupt price discovery. These Crypto Firms may face increased oversight if risks to market structure continue to escalate.
Legal experts argue that many tokenized shares function as derivatives, lacking the traditional shareholder rights, such as voting or ownership. Diego Ballon Ossio of Clifford Chance noted, “You’re buying exposures to those shares through synthetic instruments.” He emphasized the increased responsibility of buyers to understand the risks associated with products.
The World Federation of Exchanges supports regulated approaches, such as Nasdaq’s tokenization proposal, but urges stricter controls elsewhere. Nasdaq’s plan to tokenize shares reflects growing institutional interest in blockchain applications. However, they emphasize that investor protections must be comparable to those in traditional markets.
Crypto Firms Target $400 Trillion Finance Market
Crypto Firms continue to expand their tokenization efforts, despite rising pressure from regulators and traditional financial stakeholders. Research from Animoca Brands suggests tokenized real-world assets (RWAs) could address a $400 trillion traditional finance market. Analysts Andrew Ho and Ming Ruan describe this as a significant growth opportunity.
The 2025 Skynet RWA Security Report estimates the RWA market could grow to $16 trillion by 2030. Tokenized U.S. Treasuries alone are projected to reach $4.2 billion this year, driven by short-term debt activity. Major banks and asset managers are also testing tokenization for yield optimization and faster settlement.
Kraken and Ondo Finance argue that well-structured tokenized assets can enhance transparency and accessibility for global investors. Crypto Firms remain confident that properly regulated tokenization will benefit both markets and investors. However, clear legal definitions and enforcement will likely determine the market’s long-term stability.
