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Crypto firms’ tokenized stocks spark investor protection concerns

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Crypto companies are racing to launch stock-backed tokens, but traditional financial firms and regulators are sounding alarms over potential risks to investors and market stability.

Encouraged by President Trump’s pro-crypto policies, major players such as Robinhood, Gemini, and Kraken have rolled out tokenized stock products in Europe, with Coinbase and Dinari seeking U.S. approval. Even Nasdaq has proposed offering tokenized shares — a sign that the concept is moving into mainstream finance.

These blockchain-based instruments are designed to mirror traditional equities while enabling 24/7 trading and instant settlement. Their combined market value has surged to $412 million from just a few million a year ago, according to RWA.xyz. But critics warn that many of these products lack ownership rights, dividends, and regulatory safeguards, making them more akin to derivatives than stocks.

“There’s a real risk investors don’t know what they’re buying,” said Diego Ballon Ossio, a partner at Clifford Chance. Legal experts say inconsistent rights and disclosures across issuers could undermine market integrity.

While some firms like Kraken and Ondo Finance claim to fully back their tokens with underlying assets, others — including Robinhood’s tokens pegged to OpenAI — have faced regulatory scrutiny for using derivative structures.

Regulators in both the U.S. and Europe are divided over how to classify and supervise these products. Financial groups including Citadel Securities and SIFMA argue that tokenization should not bypass investor protection rules, warning that liquidity could fragment across unregulated markets.

Billionaire-Backed Bitcoin Firm OranjeBTC to List on Brazil’s B3 Exchange

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OranjeBTC, a Brazilian cryptocurrency firm backed by some of the biggest names in global finance and crypto, will begin trading on Brazil’s B3 stock exchange next week, marking a major step in the mainstream adoption of bitcoin-linked companies in Latin America.

The move positions OranjeBTC to directly challenge Méliuz (CASH3.SA), the first Brazilian firm to adopt a bitcoin treasury strategy.

BITCOIN AS CORE TREASURY ASSET

Founded by Guilherme Gomes, OranjeBTC aims to attract domestic investors who might not be able to hold digital assets directly due to regulatory restrictions.
“Certain investors are prohibited from buying bitcoins directly,” Gomes explained. “Through OranjeBTC, they’ll be able to gain exposure to bitcoin via the stock market.”

The company currently holds 3,650 bitcoins in its corporate treasury—worth more than $420 million at current prices—and plans to increase its reserves as it expands.

“Bitcoin will change financial systems as we know them,” Gomes said. “Our main focus is bitcoin at the highest level — building infrastructure, knowledge, and value around it.”

STRATEGIC INVESTORS AND BACKERS

Before its public debut, OranjeBTC attracted investments from high-profile figures and firms, including:

  • Ricardo Salinas, the Mexican billionaire and owner of Banco Azteca,

  • Cameron and Tyler Winklevoss, co-founders of Gemini,

  • FalconX, a leading crypto brokerage, and

  • Adam Back, a pioneering figure in bitcoin mining and CEO of Blockstream.

These heavyweight backers underscore growing institutional confidence in bitcoin-focused companies emerging from Latin America.

A REVERSE IPO STRATEGY

Instead of pursuing a traditional initial public offering, OranjeBTC is using a reverse IPO mechanism — listing its shares through Intergraus, an education-focused subsidiary already traded on B3.

This approach allows OranjeBTC to bypass the lengthy approval process typical of standard IPOs, speeding up its entry into public markets.

BITCOIN EDUCATION AND MARKET ACCESS

Beyond serving as an investment vehicle, OranjeBTC plans to use its education platform to help shareholders and retail investors better understand bitcoin markets and blockchain technology.

The company’s broader mission, according to Gomes, is to make bitcoin investment and knowledge accessible to everyday Brazilians, while building a strong local presence in the country’s fast-growing digital asset ecosystem.

With its debut on B3, OranjeBTC will become one of the few publicly traded companies in the world with bitcoin as its central treasury reserve, signaling a broader institutional shift toward digital assets in emerging markets.

Gemini Raises $425 Million in IPO, Priced Above Range at $28 per Share

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Gemini Space Station, the cryptocurrency exchange founded by Tyler and Cameron Winklevoss, raised $425 million in its U.S. initial public offering on Thursday, pricing shares above the marketed range at $28 apiece.

Key Details

  • Shares sold: 15.2 million

  • IPO proceeds: $425 million (capped despite oversubscription of 20x)

  • Valuation: $3.33 billion (non-diluted)

  • Ticker symbol: GEMI (trading starts Friday on Nasdaq)

Demand and Pricing

  • Initial IPO range: $17–$19, later raised to $24–$26 on strong demand.

  • Final pricing at $28 reflects robust investor appetite.

  • Nasdaq invested $50 million in a private placement alongside the IPO.

Sector Momentum

  • Gemini’s IPO follows Figure Technology’s $787.5M debut on Wednesday and earlier offerings by Bullish and Circle.

  • Record-high crypto prices and regulatory easing under President Trump are driving momentum for public listings.

Legal and Regulatory Context

  • Gemini is still engaged in an SEC lawsuit over its crypto lending program, accused of failing to register before offering to retail investors.

  • A status report on the case is due September 15.

  • The exchange has been linked politically, with reports suggesting Tyler Winklevoss lobbied the White House against a CFTC nominee.

Market Significance

Gemini’s IPO highlights investor enthusiasm for crypto-linked equities and positions the firm as a high-profile player in the mainstream financial market, despite ongoing legal scrutiny.