A full-page advertisement in the Wall Street Journal warning public company CEOs about the risks of tokenizing their shares has triggered a debate over whether such processes could destabilize capital markets, with several crypto industry leaders calling the messaging misleading.
The ad, published on Sunday, the 24th, was funded by the Common Sense Leadership Fund, a 501(c)(4) non-profit civic organization founded in 2021 and based in Arlington, Virginia. The group describes itself as dedicated to promoting policies that support individual freedom, lower taxes and less regulation.
What the ad warns
The advertisement urges CEOs to opt out of tokenization and lists a series of risks it associates with tokenized shares, including:
- Price disparities across different token venues
- Obfuscation of who owns the tokens
- Impaired ability to raise capital
- Cybersecurity risks
- Possible market manipulation
- AML/KYC loopholes
- A lack of investor protection for tokenized assets
The ad also stresses that CEOs could be held liable for "anything that goes wrong."
Industry response
Carlos Domingo, CEO of Securitize, a public company that provides tokenization services to traditional firms, described the ad's portrayal of the process as "misleading," saying it "mixes tokenization with how it is done and where those tokens trade."
"None of those concerns apply to proper tokenization done in the US under SEC regulations and traded on regulated venues," Domingo said. He attributed the fears to offshore synthetics — derivatives designed to replicate the economic performance of a stock without conveying ownership.
Domingo framed the attention as beneficial for firms taking a regulated approach, saying he sees it "as a tailwind for companies like ours doing it the right way, which was never easy, but it's a durable long-term business model."
Concerns over intermediary ownership
Gabriel Shapiro, co-founder and CEO of MetaleX, raised a separate issue: growing ownership by intermediaries such as Robinhood and Coinbase. Such platforms could hold real power in contested voting calls where a few percent can decide the outcome, he argued.
"Public companies will care about this more than crypto people expect," Shapiro said.
Companies distance themselves from tokenized venues
Several major companies have already objected to being listed by OKXICE, a joint venture that has applied to act as a Tokenized Security Venue (TSV) under the Securities and Exchange Commission's Innovation Exemption. Those companies include Microsoft, Alphabet, Goldman Sachs, Qualcomm, Caterpillar, McDonald's and Western Digital.
The exchange brings the long-running question of how real-world assets and equities will be tokenized back into mainstream discussion, with supporters and critics divided over whether existing U.S. securities rules already address the risks raised in the advertisement.
