41–50 of 68 posts
Earlier quoted context omitted.
> I can go to FINRA and the SEC if someone does not deliver or properly custodian my security. Who do I go to when the blockchain doesn't? You can go to FINRA and the SEC.
Ahh, I was unaware FINRA and the SEC had the ability to reverse and override digital asset transactions on public cryptoasset networks. My apologies.
One thing to note for people who don't have a securities background is that exchanges have offered "depositary receipts" which is essentially the same thing for some time - the innovation here is making the depositary receipt into a crypto token. Depositary receipts are used typically to provide a secondary listing for a stock outside the country of its primary listing. So for example on Nasdaq I can trade a "Vodapho…
Would tokenized shares remove the need for VIEs and contractual custodians in the Cayman islands for Chinese ADRs?
Approximately everybody in the US is able to get a brokerage account for trading public shares (with actual SIPC insurance, very limited liability for fraud etc). At the same time, the publicly investable stock market constitutes less and less to the total universe of US companies. Unless tokenized securities will somehow make private investments accessible to non-accredited investors, this initiative seems to be ent…
The main value proposition is faster settlement. The big institutions can measure their profits in terms of settlement time, going from 2 days to 1 day (previous infrastructure upgrades) to instantaneous (this) makes them more money.
Or how you see big institutions making more money by reducing settlement time?
Earlier quoted context omitted.
Ahh, I was unaware FINRA and the SEC had the ability to reverse and override digital asset transactions on public cryptoasset networks. My apologies.
The article is not about blockchain tokens that are securities themselves, hence "tokenization".
> The basic idea behind tokenization: Use blockchain technology that powers cryptocurrencies to create digital tokens as stand-ins for things like bonds, real estate or even fractional ownership of a piece of art and that can be traded like crypto by virtually anyone, anywhere at any time.
> However, the SEC has struck a cautionary tone when it comes to tokens. Shortly after Robinhood’s announcement, SEC Commissioner Hester Peirce, who has been an outspoken crypto supporter, issued a statement saying companies issuing tokenized stock should consider “their disclosure obligations” under federal law.
> “As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset,” Peirce said.
https://www.sec.gov/newsroom/speeches-statements/peirce-stat...
> The SEC’s 2025 rules say crypto tokens are likely securities if they act like investment contracts. This means tokens sold with promises of profits, driven by a central team’s efforts, will be categorized as securities. The SEC’s 2025 guidance outlines specific scenarios in which crypto tokens will likely be classified as securities. These typically involve projects that are still centrally controlled, promote profit expectations, or offer limited utility at the time of sale.
https://cointelegraph.com/explained/secs-2025-guidance-what-...
Schrödinger's tokens?
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I see how it can make sense on the settlement layer, but that's of absolutely no relevance to individual investors, which is who Robinhood are targeting. In the EU, as far as I remember most modern brokers let you buy shares with unsettled proceeds of others without restrictions; in the US, getting a margin account takes no effort at all and bypasses the freeriding rules too.
Unfortunately, Robinhood makes money by selling individual investor orderbook data to the big guys so they can front-run them
It actually gets retail investors better prices than institutional or professional ones, since the counterparty can safely assume that there's "dumb money" on the other side of the trade.
That's not to say it's not controversial in some aspects, but it's not as simple a situation as you make it out to be.
Also, somewhat ironically, the front running risk on many decentralized exchanges is much higher due to MEV being a hard problem to solve trustlessly.
Someone explain to me like I’m 5 how tokenization makes it possible to trade private companies. Wouldn’t that mean that the owners of those private companies are somehow issuing tokens related to their ownership? Or is this yet another magical crypto thing where we collectively agree/imagine that tokens are somehow pegged to private companies, without any direct ownership to said companies?
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I can go to FINRA and the SEC if someone does not deliver or properly custodian my security. Who do I go to when the blockchain doesn't? The value is not in the technical implementation, the value is in the trust and legal framework around ownership and counterparty transactions. (paper stock certificates are no longer a thing except in rare circumstances, digitization took place long ago ["dematerialization"] at the…
> I can go to FINRA and the SEC if someone does not deliver or properly custodian my security. Who do I go to when the blockchain doesn't? You can go to FINRA and the SEC.