Recently, the brokerage Robinhood announced the launch of a 'tokenized stock' service for some users in Europe, allowing them to trade tokenized certificates of certain U.S. stocks. More notably, the platform has offered users tokens of unlisted companies such as OpenAI and SpaceX for free—meaning that private market targets previously difficult for ordinary investors to access are now being opened to the public through blockchain tokens, without these companies having to fulfill the disclosure obligations that public companies do. Behind this phenomenon lies the collision and evolution of nearly a century of regulatory rules and market financing models in the U.S. stock market. The starting point of U.S. stock regulation: From disorder to structured regulation In the early years, the U.S. public stock market lacked standards, allowing anyone to raise funds by selling stocks to the public, often accompanied by false promises. This disorder reached its peak in the 1920s, with retail investors heavily speculating, ultimately leading to the stock market crash and the Great Depression. To rebuild market confidence, the U.S. Congress passed the Securities Act (1933) and the Securities Exchange Act (1934) in the 1930s, establishing core regulatory principles: if a company sells stocks to the public, it must disclose business details, publish audited financial statements, and publicly disclose significant events, ensuring that investors are fully informed. This rule only applies to public companies, with a leniency for private enterprises that do not raise funds from the public—for example, small businesses funded by family members are not required to submit audit reports to regulatory agencies. Changes in market dynamics: The rise of the private market and the dilemma of public investment In the past, the main way for companies to raise large-scale funds was through going public and raising money from retail investors in the public market; however, today, the private market has become the mainstream choice. Technology companies like SpaceX, OpenAI, and Stripe, with valuations exceeding $100 billion, can raise billions of dollars through venture capital, private equity funds, and other channels without going public. For these companies, the advantages of not going public are significant: no need to disclose financial reports regularly, avoidance of lawsuits arising from information discrepancies, reduction of activist shareholder interference, and no pressure from stock price fluctuations on management. However, this also makes it difficult for ordinary investors to participate in quality private market investments, forcing them to acquire fragmented equity through gray channels at high prices. This has led to controversy: in modern economic growth, many high-potential companies are concentrated in the private market while ordinary investors are excluded, raising the question of whether this situation needs to change. Attempts to break the deadlock: The feasibility of four paths If the public is to participate in private market investments, there are roughly four ideas, each with its limitations: First, simplify the listing process. By reducing information disclosure requirements, lowering litigation risks, and limiting shareholder activism, the cost of going public for companies could be lowered. However, this requires a balance between facilitating financing and protecting investors, potentially increasing risks faced by retail investors. Second, strengthen regulation of private enterprises. For example, legislation could require private companies with certain income or valuation thresholds to publicly disclose audited financial statements and bear legal responsibility for information discrepancies. In 2022, the U.S. SEC explored a similar plan but made limited progress due to opposition from private enterprises. Third, restructure capital allocation. Reducing the concentration of capital among large institutions could force companies to rely on public market financing. However, this involves deep economic and wealth distribution adjustments, making it highly unfeasible. Fourth, abolish mandatory disclosure rules for public companies. Allow companies to choose whether to disclose information to the public, allowing investors to assess risks themselves, while retaining accountability for fraudulent activities. This path is rarely publicly supported due to its disruptive nature to a century-old regulatory framework—after all, the current rules are considered guarantees of depth, reasonable valuation, and low fraud rates in the U.S. stock market. The 'shortcut' of tokenization: Potential risks of bypassing rules The cryptocurrency industry offers another possibility: raising funds by issuing 'tokens' (similar to equity certificates), circumventing securities law constraints. Although this model has varied effects, it has gradually revived in recent years, giving rise to the concept of 'stock tokenization'—converting private company stocks into blockchain tokens for public sale. The technical advantages of tokenized stocks include self-custody, leveraged trading on DeFi platforms, and 24-hour trading, but the core appeal lies in the fact that under the name 'token,' private company stocks can bypass U.S. disclosure rules for public sale, essentially undermining the securities law system established in the 1930s. Currently, the U.S. has not fully opened up such operations, but leading institutions have begun to lay the groundwork. The tokenized stocks offered by Robinhood to European users are custodied by licensed institutions to ensure asset correspondence, and the tokens of OpenAI and SpaceX that are given away directly aim at the goal of 'allowing the public to invest in private market targets.' Platform executives have stated: 'It's illogical that the public can purchase depreciating goods and speculate on meme coins but cannot invest in OpenAI.' BlackRock CEO Larry Fink has also publicly supported tokenization, believing it can eliminate 'legal friction'—allowing private enterprises unwilling to comply with disclosure rules to raise funds from the public through tokens. Echoes of history: Rebalancing regulation and the market Around 2020, crypto projects raised large amounts of funds through false promises, triggering a speculative frenzy followed by a 'crypto winter.' At that time, the market speculated that its outcome would either be industry silence or regulation akin to that of the 1930s stock market (for example, capital requirements for stablecoins). However, the real path is more complex: the financial industry seems to be pushing stock market rules closer to the crypto market rather than making the crypto market adapt to existing regulations. This means that the disclosure rules established nearly a century ago to tame disorderly markets may gradually be eroded by technological innovation. When 'stocks' of OpenAI and SpaceX can be easily purchased through a mobile phone without relying on public financial reports, is this an expansion of public investment channels or the beginning of a new round of market disorder? The answer may lie in the rebalancing of regulation and innovation, and this journey has already become a new chapter in financial history.