according to the website - By Cryptopolitan_News

Sharp price fluctuations for tokenized stocks hit them just hours after launch.

Cryptocurrency enthusiasts claim they are restoring Wall Street on the blockchain. They argue that tokens linked to real stocks, such as Nvidia, Apple, and even Elon Musk's Tesla, can simplify global investing, but once you start paying attention, chaos, fake prices, legal issues, and a complete lack of any restrictions await you.

At the end of June, Robinhood, Kraken, Gemini, and Bybit introduced blockchain versions of US stocks and ETFs for users outside the US. Robinhood tried to overshadow everyone by organizing a grand event in France. They even styled it like a Hitchcock movie.

But everything went wrong. Their tokens, created for companies like OpenAI and SpaceX, which have not even gone public yet, sparked negative reactions. OpenAI immediately responded on social media: "We have not collaborated with Robinhood, have not participated in this, and do not endorse it." The Central Bank of Lithuania, which regulates Robinhood's activities in Europe, contacted the company for clarification.

Sharp price fluctuations for tokenized stocks occurred just hours after launch.
On July 3, the token AAPLX, intended to reflect the value of Apple shares, reached $236.72, 12% higher than the actual price of Apple. The Amazon token, AMZNX, jumped to $891.58 just two days later — four times the closing price of the last Amazon session.

But the biggest distortion occurred the same week on Jupiter, a peer-to-peer trading platform. One trader tried to buy AMZNX for $500, and that alone raised the token's value to $23,781.22. This is more than 100 times the real value of Amazon.

All these tokens were issued by the Swiss company Backed Finance, which released them on June 30 as part of a partnership with Kraken and Bybit. Backed calls them "xStocks" and claims they are backed by real stocks one-to-one.

When people buy more tokens, the company buys more shares. When people sell, they burn tokens and release shares. The idea is for token prices to remain close to real prices. But in reality, these tokens are hardly traded.

Liquidity is low, and a small transaction is enough to completely crash the price, especially on weekends, nights, or holidays when the stock market is closed.

A representative from Backed allegedly told the Journal: "We are actively monitoring any of these price discrepancies and working with exchanges to ensure they are addressing them and following best practices to prevent this from happening again." However, cryptocurrencies are not known for their "best practices," especially when trading occurs on anonymous platforms.

The absence of oversight opens up opportunities for abuse.
The US stock market relies on strict oversight. Brokers verify identities. Exchanges monitor trades. Regulators track suspicious activity. This entire system does not exist here. Backed's xStocks do not require permission.

This means they can move between wallets and platforms without any issues. Kraken may log identification data, but Jupiter does not. Once tokens transition to a decentralized platform, they completely vanish from sight.

Gemini co-founder Cameron Winklevoss claimed: "By tokenizing stocks, we believe we can export US capital markets to any point in the world." But this dream ignores the fundamental issue: stocks traded without transparency and regulation provoke disaster. Of course, blockchain makes transactions public, but names and faces can be permanently hidden, as we saw with North Korea's Lazarus Group. It may not even be North Korea at all, because we can't know for sure. This is how insider trading and pump-and-dump schemes thrive.

Carlos Domingo, CEO of Securitize, described the situation as his reality: "This is a worm bank, and at some point it will burst because people will find ways to do something illegal with these tokens."

And this is the real risk. These tokens may seem like progress, but they also simplify the possibility of market abuses. And there are no signs that this was an isolated incident.


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We found this article very interesting, and we decided to introduce it to our subscribers and readers! As it is, in the information field, the first time it has been voiced OUT LOUD, regarding what, for example, token holders could have faced - OM ...

What both I and my co-authors (who also monitor the news agenda of the financial world) have already faced. No matter how much they try to "advertise" trendy movements - "tokenization of real assets" (RWA) in the market, these assets have nothing in common with real (market value)!!! At least not today (!).

If you have arguments to the contrary, share your views on the issue (in the comments). We would be interested to hear your perspective.