• The World Federation of Exchanges has warned the SEC that tokenized stocks mislead investors.
• The letter comes as platforms like Coinbase and Robinhood expand their tokenized equity offerings.
• The WFE demands that regulators apply existing securities laws to all tokenized stock products.

Global stock exchanges are pressing regulators to act against tokenized equities, warning that the products risk misleading investors and damaging trust in financial markets.

The World Federation of Exchanges (WFE), an industry body that represents the world’s top exchanges and clearing houses, sent a formal letter to the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force, the European Securities and Markets Authority (ESMA), and IOSCO’s Fintech Task Force.

What Is the WFE’s Core Complaint Against Tokenized Stocks?

In the letter, the WFE said tokenized stocks “mimic” traditional equities but do not provide the same rights or protections. 

“We are alarmed at the plethora of brokers and crypto-trading platforms offering or intending to offer so-called tokenized U.S. stocks,” the group wrote. It stressed that such products are marketed as stoc…

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