Carlos Domingo didn't hold back. The Securitize CEO went public in mid-July with a blunt warning: most tokenized stocks trading on crypto exchanges are fake, unauthorized, and sitting on a ticking time bomb of insider-trading exposure.
His flashpoint was simple. Tokens claiming to track Apple or Amazon shares often drift 300% away from real prices. Nobody at those companies blessed these products. There's no issuer oversight, no custody verification, no securities compliance. Just synthetic wrappers floating on offshore exchanges where anything goes.
The Accountability Gap
When a company's equity gets tokenized without its knowledge or consent, insider-trading safeguards evaporate. Someone with advance notice of a bad earnings quarter could dump unauthorized tokens on an unregulated exchange without filing anything, without compliance watching, without an audit trail. The SEC has zero visibility.
Domingo called the whole setup a "can of worms" about to explode. He's not speaking from theory. Securitize just landed on the NYSE itself after closing a SPAC deal in early July, now trading as SECZ. The firm manages $4 to $4.5 billion in tokenized assets and runs what it calls "native, issuer-sponsored tokenization," meaning the actual company participates in the process.
He's been pushing this angle for years. Domingo testified before Congress in 2024 arguing for regulated pathways that would drag digital securities into existing legal frameworks instead of leaving them in regulatory limbo.
The contrast is stark. Legitimate tokenization requires issuer involvement, proper price feeds tied to real markets, and compliance architecture. The rogue versions floating around crypto trading floors have none of it. They're closer to counterfeit currency than financial products.
This article covers market developments and regulatory concerns. It is not investment advice and should not be treated as a recommendation to buy or sell any security.
