May 25, 2026
The Securities and Exchange Commission (SEC) has a plan to let people trade stocks on the blockchain, buying and selling them like crypto.
“Big Short” investor Michael Burry isn’t happy about that, to say the least.
Advertisement
“We may be headed full-on to a Snow Crash cyber-punk future,” said Burry this week on his Substack, Cassandra Unchained. “This may be the point in time that needs to be stopped from going forward by some future being.”
If the plan goes through, stocks could be tokenized without a company’s consent and traded 24/7, unlike the U.S. stock market, which opens at 9:30 a.m. ET and closes at 4 p.m. ET on weekdays only.
Burry isn’t the only big name in investing that’s against stock tokenization. Citadel Securities, a major trading firm, sent a letter to the SEC pushing back against the plan in December 2025.
Here’s what the change would mean for both companies and consumers.
Fragmentation could be a major problem for tokenized stocks
Bloomberg reports that there will be two types of tokenized stocks under the SEC’s new “innovation exemption” plan: stocks that the companies tokenize themselves or authorize to be tokenized, and stocks that are tokenized by third parties without the company’s consent.
Third-party tokenized stocks might not carry all of the privileges that stocks normally come with, such as voting rights and dividends. On the other hand, you would get immediate proof of ownership backed by the blockchain.
“The tokens may not represent actual ownership of the company, and token holders may not get all the benefits of the share,” Daniel Labovitz, CEO of Green Impact Exchange, told Business Insider.
Advertisement
Tokenized stocks could also cause fragmentation, Labovitz says: “When the same security trades in different markets that aren’t connected to each other, the price of assets can diverge, meaning that some buyers will overpay for their token.”
This is especially likely since crypto markets are open 24/7, while the stock market operates under much more limited hours. That gives the two markets plenty of time to get off-sync.
Citadel Securities also voiced concerns about fragmentation in their letter to the SEC.
“While the rules governing the national market system can continue to be finetuned, facilitating the emergency of a “shadow” U.S. equity market… would allow tokenized U.S. equities to trade completely outside of the national market system, fragmenting liquidity and undermining core investor protections,” it said.
Advertisement
All of this means that tokenized stocks could make it hard for consumers to know what their investments are actually worth.
Must Read
- You can now build wealth like a landlord for as little as $100 — and no, you don't have to chase down rent or take 3 A.M tenant calls
- Goldman Sachs used to hoard prime real estate deals for the ultrarich. Two ex-analysts just opened the door for $250
- Robert Kiyosaki begs investors not to miss this ‘explosion’ — says this 1 asset will surge 400% in a year
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Stock tokenization means less regulation and more consumer risk
Tokenized stocks also don’t have to follow all of the regulatory standards that the stock market does.
“Regulators have one job. Do not open scary doors,” Burry said in a comment to his Substack post. This new plan would open consumers to new and scary risks they don’t usually have to face when investing through their brokerage or retirement accounts.
Bloomberg reported that this exemption could weaken key investor protections, such as know-your-customer and anti-money laundering protections.
Decentralized finance (DeFI) platforms are also prone to hacks. On April 18, hackers stole almost $300 million from DeFi platforms, leading to the crypto version of a bank run on one of the largest DeFi platforms.
Additionally, 24/7 market access could also lead to increased volatility and even stock manipulation, according to Shay Boloor, chief market strategist at Futurum Equities.
Investing probably won’t turn into a cyberpunk dystopia overnight if this exemption goes into law, but it could get much riskier, even for people who play it safe.
You May Also Like
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
- Robert Kiyosaki issues grim warning for baby boomers. Many could be ‘wiped out’ and homeless ‘all over’ the country. How to protect yourself now
Kit Pulliam is a DC-based financial journalist with over five years of experience writing, editing, and fact-checking financial content.
