Stock Tokens: Genius or Disaster?

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Right then, listen up. The American blokes at the Securities and Exchange Commission – a bunch who usually move at the speed of a particularly sluggish snail – have finally poked their noses into this newfangled business of turning shares into digital doodads. And wouldn’t you know it, just as Robinhood’s top boss started flapping his gums about doing exactly that!

Now, there was this chap, Do Kwon. A terribly clever fellow, or so he thought. He built something called Mirror Protocol – a fiddly contraption promising to let anyone trade bits of Apple and Tesla. It all went POP! like a badly made balloon, leaving investors a whopping 40 BILLION dollars poorer. And Do Kwon? Well, he’s currently enjoying a nice, long holiday in a rather grim establishment, courtesy of a judge and a rather lengthy prison sentence.

The SEC and Their Tokeny Rules

On January 28th, the SEC had a bit of a think and produced a “Statement on Tokenized Securities.” Basically, they’ve sorted these digital shares into boxes. The first box is for companies making their OWN digital shares – sensible, if you ask me. The second box? Well, that’s for folks taking existing shares and making digital copies. Fancy that!

Inside that second box, they have more boxes! Some copies are kept safe with the real shares held somewhere secure. Others are… well, let’s just say they’re more like pretend shares. You’re betting on the price going up or down, but you don’t actually own anything. A bit like playing a game of marbles, really, but with rather larger stakes.

Mirror Protocol: A Warning Tale

Remember that Do Kwon fellow? Mirror Protocol was his grand idea – a way to get anyone trading ‘pretend’ shares of big companies. He went on and on about ‘empowering the little people’ and ‘decentralization’ and other such nonsense. Sounded too good to be true, didn’t it?

Turns out, it was too good to be true. The authorities discovered that Do Kwon wasn’t this grand, hands-off visionary. Oh no. He and his team were secretly pulling all the strings, inflating numbers like a pufferfish, and generally behaving like proper charlatans.

And then, everything came crashing down. His special digital money, UST, went belly up, taking 40 billion dollars with it. Do Kwon, trying to escape with a fake passport, ended up in the clink for fifteen years. A rather sticky end, wouldn’t you say?

Robinhood’s Attempt at Respectability

Now, Robinhood is already messing about with these digital shares in Europe, calling them “tokenized contracts”. They’re quite upfront, thankfully, admitting they’re not the real deal. Perfectly safe, they say, and regulated to high heaven. Unlike this Do Kwon character.

But here’s the funny thing. Mirror Protocol tried to look like a friendly little community project to avoid pesky regulations. Robinhood, on the other hand, is playing by the rules… for now.

Tenev’s Big Plan

Robinhood’s boss, Vlad Tenev, had a big announcement on the very same day as the SEC’s official word. He reckons the old way of settling trades – waiting a few days – is utterly ridiculous. He wants everything to happen instantly using these digital shares.

“T+1 is still far too long!” he exclaimed, probably while polishing his monocle. “We need to be able to trade 24/7 and lend and borrow these digital shares!” A grand idea, perhaps, or a recipe for more chicanery. Only time will tell.

A Plea for Clarity

Tenev is now begging the government to pass a law supporting these digital shares. He wants a guarantee that the SEC won’t suddenly change its mind and shut everything down. Seems a bit desperate, doesn’t it?

The SEC’s statement isn’t a strict set of rules, more like a suggestion. But the disaster of Mirror Protocol proves what happens when nobody’s keeping an eye on things. Do Kwon thought he was above the law, and the SEC is making it clear that’s not going to wash.

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2026-01-29 08:06