The Truth About Tokenized US Stocks: Regulatory Blind Spots and Investment Traps Behind Instant Trading

Have you ever been attracted by digital platform advertisements promising "24/7 US stock trading" and "instant execution with zero slippage"? As Uncle Haowai, a practitioner who has been deeply involved in quantitative trading and financial education for many years, I use real regulatory data and market research to provide you with an in-depth analysis of the nature of tokenized US stocks, helping you avoid investment traps disguised as innovation.

I. Cognitive Reconstruction: Why "Tokenized US Stocks" Take You Further Away from Real Investment

1.1 Traditional Cognitive Misconceptions: Investment Illusions Under Blockchain Packaging

When most investors see "tokenized US stocks," what comes to mind is: "Using blockchain technology to buy and sell real US stocks while enjoying the convenience of decentralization." This perception is precisely the misleading narrative carefully crafted by platforms.

In my daily observations, I've found that over 80% of investors cannot accurately distinguish between the essential differences of tokenized US stocks and real US stocks. They are attracted by concepts like "innovation," "convenience," and "round-the-clock trading," yet overlook the most core question: What exactly are you holding?

The truth is: The tokenized US stocks provided by the vast majority of platforms are essentially digitized contracts based on US stock prices, not real stock ownership. It's like buying a "betting slip on Apple's stock price movements" rather than actual shares of Apple Inc.

1.2 Sources of Cognitive Bias: Technology Mystification and Marketing Deception

Why do investors develop such cognitive biases? It mainly stems from three levels:

Technology Mystification Level: Concepts like blockchain and smart contracts give people the illusion of being "more advanced and transparent," leading investors to mistakenly believe that technological innovation equals investment value.

Convenience Trap: "Advantages" like 24/7 trading, zero fees, and instant execution mask the underlying lack of real market depth.

Regulatory Gray Areas: In environments where regulation is unclear, platforms deliberately blur conceptual boundaries, making investors think they're enjoying "regulatory arbitrage" dividends.

II. The True Core of Tokenized US Stocks: Distinguishing Real Custody from Synthetic Products

2.1 Identification Standards for Real Tokenized US Stocks

While criticizing most platforms, we must also acknowledge that there are indeed some tokenized platforms that truly hold underlying US stock assets. How to distinguish between real and fake? The key lies in the following standards:

Core Characteristics of Real Custody:

• Third-party Custody Proof: Asset custody certificates issued by renowned custodial banks such as Deutsche Bank, JPMorgan Chase, etc.
• Transparent Audit Reports: Regular publication of asset reconciliation reports audited by Big Four accounting firms
• Regulatory Compliance: Obtaining corresponding securities service licenses in the US, Switzerland, Hong Kong, and other jurisdictions
• Redemption Mechanism: Allowing large investors to directly exchange tokens for underlying stocks

Case Analysis: Platforms like Backed Finance and Swissborg in Europe indeed operate real tokenized stock services under Swiss financial regulation, with each token backed by corresponding physical stock custody.

2.2 Market Mainstream: Synthetic Products and the Technical Fog of "Real Custody"

Currently, there are two main types of tokenized US stock models in the market, but both have varying degrees of problems:

Model One: Fully Synthetic (Market Mainstream) These platforms don't hold any real stocks and are essentially digital packaging of traditional Contracts for Difference (CFDs).

Model Two: "Real Custody" Type (Claimed by Few Platforms) Some platforms claim to operate according to the following four-step process:

1. Purchase Real Stocks: Platforms claim to buy real stocks and ETFs like Apple, Google, Microsoft
2. Third-party Custody: Entrust stocks to custodial institutions (some platforms claim custody in Jersey, UK)
3. 1:1 Token Issuance: Issue corresponding quantities of Apple Coin, Google Coin, Microsoft Coin, etc.
4. User Trading: Investors buy and sell these tokens

Key Issues with "Real Custody" Model:

Verification Challenges:

• How to ensure platforms actually purchased the claimed number of stocks?
• Do custodial institutions have sufficient regulatory protection and insurance?
• Is there independent third-party real-time auditing?
• Can users actually redeem physical stocks in emergency situations?

Case Analysis: Taking some platforms claiming "real custody" as examples, investors need to verify:

• Regulatory status and credibility of custodial institutions
• Degree of segregation between custodial assets and platform operational funds
• Authenticity and completeness of regular audit reports

As Uncle Haowai's professional observation: Even models claiming "real custody" are far from having the comprehensive protection mechanisms of traditional brokers. Most such platforms still have enormous credit and technical risks.

2.3 Regulatory Compliance Reality: Why Platforms Choose "Pseudo-Innovation"

If digital platforms were to provide real US stock trading services, they would need to meet extremely strict regulatory requirements:

US SEC Regulatory Requirements:

• Must register as a securities broker-dealer
• Obtain FINRA membership, with annual compliance costs typically ranging from $1-5 million
• Establish a complete Anti-Money Laundering (AML) system
• Need direct connection to US stock clearing systems (DTC, NSCC)

This explains why the vast majority of digital platforms choose to provide "tokenized US stocks" rather than real US stock trading: High compliance costs and regulatory uncertainty make platforms more willing to operate in gray areas.

2.4 Essential Revelation: CFD Model in New Packaging

The tokenized US stocks of most platforms are essentially blockchain-packaged versions of traditional CFDs (Contracts for Difference):

Core Mechanism Comparison:

• Counterparty: Both are the platform itself, not the real market
• Profit/Loss Source: Entirely based on price differences, not involving actual asset ownership
• Risk Nature: Both have counterparty risk and platform bankruptcy risk

Key Difference in Packaging Method: Traditional CFDs honestly admit they are derivative contracts, while tokenized US stocks use the concept of "holding tokens" to deliberately blur the essence, creating the illusion of "owning assets" for investors.

2.5 Historical Comparison: 20 Years of Practice in the Forex Industry

This model is not some technological innovation. As early as the 2000s, traditional forex platforms like IG Markets, OANDA, and GAIN Capital began providing US stock CFD trading, with over 20 years of history.

Operational Characteristics of Traditional Forex CFDs:

• Transparent Pricing: Clearly display bid-ask spreads and overnight interest fees
• Regulatory Standards: Strictly regulated by authoritative institutions like UK FCA, Australia ASIC
• Risk Disclosure: Detailed explanation of counterparty risks, never claiming to "hold stocks"

"Regression" of Modern Tokenized US Stocks: Compared to the transparency standards of traditional CFDs, many tokenized US stock platforms have actually regressed in transparency:

• Using blockchain concepts to package and hide CFD nature
• Promoting "zero fees" while hiding real cost structures
• Operating in regulatory gray areas, lacking investor protection

2.6 Token Standard Chaos: Hidden Risks of Liquidity Fragmentation

The current tokenized US stock market has a severely overlooked structural problem: The same stock may have multiple different token versions.

Current Status of Independent Issuance by Platforms:

Taking Apple stock as an example, tokens issued by different platforms include:

• Bybit Platform: BAAPL
• Binance Platform: AAPL (delisted)
• FTX Platform: AAPL (platform closed)
• Other Platforms: Their respective naming standards

Serious Consequences of Liquidity Fragmentation:

Inefficient Price Discovery:

• The same underlying asset may have vastly different prices across platforms
• Users need to compare prices across multiple platforms, increasing trading friction
• Arbitrage opportunities seem to increase, but risks are harder to control

Non-unified Technical Standards:

• Tokens from different platforms cannot be transferred to each other
• Smart contract interfaces and standards vary
• Cross-platform operations are nearly impossible

Amplified Systemic Risk: Each platform is an independent risk point. If any platform has problems, it could cause that version of the token to go to zero while tokens with the same name on other platforms continue trading, creating massive price distortions.

Theoretical Advantages and Practical Obstacles of Unified Standards:

Theoretical Unified Standard Model: If the market adopted unified token standards (similar to what Mirror Protocol once attempted), with all platforms trading the same Apple token, it could:

• Concentrate liquidity and improve market efficiency
• Reduce user selection costs
• Reduce redundant technical development investment

Practical Obstacles:

• Commercial Interest Conflicts: Each platform wants to control users and liquidity
• Technical Governance Challenges: Who sets the standards? Who manages the unified tokens?
• Regulatory Complexity: Unclear attribution of regulatory responsibility for cross-platform tokens

Uncle Haowai's Judgment: The current fragmented state will persist for a considerable time until the regulatory framework matures or sufficiently powerful institutions drive standardization. For investors, this fragmentation increases the complexity and risk of investment, further demonstrating the advantages of traditional investment channels.

III. Massive Gaps in Regulatory Compliance and Fund Safety Truth

3.1 Account Fund Protection: Vastly Different Security Levels

Multi-layered Insurance Protection System of Traditional Brokers:

Powerful Protection of SIPC Insurance:

• Insurance Coverage: Up to $500,000 protection per account ($250,000 cash, $250,000 securities)
• Protection Scope: Client assets remain protected even if brokers go bankrupt
• Historical Record: SIPC has protected over 99% of eligible investors in its 50+ years of existence
• Funding Source: Insurance fund jointly funded by all SIPC member brokers

Client Fund Segregation System:

• Strict Segregation: Client funds completely separated from broker's proprietary funds, stored in designated bank accounts
• Third-party Custody: Funds custodied at systemically important banks like JPMorgan Chase, Bank of America
• Regulatory Audits: SEC regularly inspects client fund safety, requiring brokers to report fund status monthly
• Immediate Protection: Even if a broker collapses that day, client funds cannot be misappropriated

"Naked" Fund Status of Digital Currency Platforms:

Harsh Reality of Zero Insurance Protection:

• No SIPC Equivalent Protection: No digital currency platform can provide SIPC-like insurance
• No Deposit Insurance: Unlike bank deposits with FDIC protection, digital assets have no insurance at all
• Platform Bankruptcy = Asset Zeroing: Once platforms have problems, user assets are likely to be completely lost
• Difficult Recovery: No specialized investor protection funds; users can only pursue partial recovery through lengthy bankruptcy procedures

Huge Risks of Mixed Fund Management:

• Mixed Fund Pools: User funds often mixed with platform operational funds
• Misappropriation Risk: Platforms may use user funds for proprietary trading or other investments
• Lack of Transparency: Users cannot know the real status of their funds in real-time
• Regulatory Vacuum: Lack of strict regulation and regular audits like SEC

Brutal Comparison of Historical Cases:

Traditional Broker Bankruptcy Case: Lehman Brothers (2008)

• Client Protection Result: Nearly 100% of client assets protected and transferred
• SIPC Role: Rapid intervention, coordinating asset transfer to other brokers
• Processing Time: Most clients resumed normal trading within weeks
• Loss Situation: Ordinary investors basically had no losses

Digital Platform Bankruptcy Case: FTX (2022)

• Client Losses: Over $8 billion in client assets disappeared
• Recovery Progress: Final recovery rate expected to be less than 50%
• Processing Time: Still in bankruptcy liquidation proceedings
• User Situation: Millions of users' funds frozen, some may be permanently lost

Other Digital Platform Failure Cases:

• Mt.Gox: 850,000 bitcoins disappeared, users lost billions of dollars
• Celsius: Platform bankruptcy, massive user fund losses
• Terra/Luna Collapse: Assets within the ecosystem almost zeroed

3.2 Fundamental Risks of Digital Assets: From Technical Convenience to Institutional Absence

Harsh Reality of Wallet Private Key Risks:

• Private Key Loss = Permanent Asset Loss, no recovery mechanism
• Key Theft = Instant Transfer, almost impossible to recover
• No "forgot password" recovery mechanism like traditional banks

Real Cases of Platform Hacks: According to blockchain security company statistics, just in 2023, multiple major platform hack incidents occurred:

• FTX Collapse: $8 billion loss, recovery rate <50%
• 2023 DeFi Hacks: Over $3 billion in losses
• Individual Users: Tens of thousands lose assets permanently due to key issues annually

3.3 Special Predicament of Mainland Chinese Investors

Ambiguity of Legal Status: Although mainland China comprehensively prohibits cryptocurrency trading and mining, as of the end of 2024, no laws or regulations prohibit individuals from purchasing and holding cryptocurrencies. However, this ambiguous state of "holding is not illegal, trading is restricted" brings enormous operational risks to investors.

"Black Money" Risks of P2P Exchange: Unable to exchange through official channels, most users are forced to use P2P (peer-to-peer) platforms for fiat currency exchange. This model has fatal risks:

• Unclear Fund Sources: Counterparty funds may come from money laundering, fraud, gambling, and other illegal activities
• Joint Liability Risk: The revised Anti-Money Laundering Law effective January 1, 2025, strikes more severely at virtual asset money laundering
• Bank Freezing Risk: Once fund chains are investigated, all related accounts may be frozen

Real Case Warning: In early 2024, Beijing police and the Beijing branch of the State Administration of Foreign Exchange announced a money laundering case involving over 20 billion yuan. In such cases, ordinary investors often become innocent victims, and it's difficult to prove their innocence after accounts are frozen.

IV. Practical Skills: How to Build the Right US Stock Investment Path

4.1 Seven Major Verification Standards for Identifying Real Tokenized US Stocks

Not all tokenized US stocks are "fake." Tokenized products that truly hold underlying assets do exist, but require strict verification. Based on the latest market research, here are the upgraded identification standards:

Standard One: Custodial Institution Verification

• Check for custody certificates issued by renowned custodial banks (Deutsche Bank, JPMorgan Chase, State Street Bank)
• Custodial assets should strictly correspond to issued token quantities
• Key Verification: Whether custodial institutions have appropriate regulatory licenses and insurance protection

Standard Two: Real-time Audit Transparency

• Whether there are audit reports issued by Big Four accounting firms
• Audit frequency: At least quarterly asset reconciliation audits
• New Requirement: Whether real-time asset reconciliation query interfaces are provided

Standard Three: Redemption Mechanism Reality Testing

• Large investors (usually over $1 million) can exchange tokens for real stocks
• Clear redemption procedures with predictable timeframes (usually T+2 to T+5)
• Key Test: Look for real large-scale redemption cases and user feedback

Standard Four: Regulatory Compliance Verification

• In the US: SEC registration or exemption, FINRA membership
• In Europe: MiFID II permits, local securities regulator approval
• Key Focus: Official confirmation documents from regulatory authorities

Standard Five: Fee Structure Rationality

• Management fees typically between 0.2%-0.8% annually
• Custody fees listed separately, no hidden bid-ask spreads
• Warning Signal: Claims of "zero fees" false advertising

Standard Six: Technical Architecture Transparency

• Whether smart contract code is open source and auditable
• Whether token issuance and destruction mechanisms are verifiable
• New Verification: Whether there are independent technical security audit reports

Standard Seven: Historical Operation Records

• Platform operation history and security incident records
• Historical performance of user fund protection
• Key Assessment: Performance under extreme market conditions

In-depth Verification Methods for "1:1 Correspondence":

Many platforms claim "1:1 stock purchase token issuance," but how to verify?

Verification Steps:

1. Review Public Holdings Reports: Require platforms to provide detailed stock holding lists
2. Cross-verify Custody Information: Directly contact custodial institutions to confirm asset scale
3. Monitor Issuance Changes: Whether token issuance increases/decreases synchronize with stock trading
4. Test Large Redemptions: Observe the impact of large redemptions on token supply

Red Flag Signal Identification:

• Refusing to provide detailed holding information
• Vague or unverifiable custodial institution information
• "Insufficient liquidity" during large transactions
• Token prices persistently deviating significantly from real stock prices

4.2 Cost-Benefit Quick Comparison: The Expensive Price of Digital Packaging

Cost Structure Comparison for $100,000 Investment:

Item	Traditional Brokers	Real Tokenized Platforms	Synthetic Digital Platforms
Fund Insurance Protection	SIPC Insurance $500K	Partial Custodial Protection	No Protection
Trading Fees	$0	0.2%-0.8% annual fee	Hidden in spreads
Withdrawal Convenience	Direct bank transfer	Can redeem physical stocks	Requires P2P exchange
Regulatory Protection	Complete regulatory system	Partial regulatory coverage	Regulatory vacuum
Bankruptcy Protection	Asset Segregation + SIPC Intervention	Depends on Custody Arrangement	Platform Bankruptcy = Asset Zero
Overall Risk Level	Low Risk	Medium Risk	High Risk

Key Conclusion: Surface "zero fees" often mean higher hidden costs and risk premiums.

4.3 Practical Investment Channel Selection Guide and Token Selection Traps

Platform Selection Matrix Based on Risk Tolerance:

Conservative Investors (Strongly Recommended):

• US Investors: Interactive Brokers, Firstrade Securities, Charles Schwab
• Chinese Investors: Tiger Brokers, Firstrade Securities, Snowball Securities
• Characteristics: Complete regulatory protection, traditional but reliable, suitable for long-term investment

Balanced Investors (Cautious Consideration):

• Real Tokenized Platforms: Backed Finance (Switzerland), Swissborg (Europe)、Kraken
• Prerequisites: Confirm custodial institutions, audit reports, regulatory licenses
• Risk Warning: Higher technical risks, suitable for small fund experimentation

Aggressive Investors (Strongly Not Recommended for Ordinary People):

• Synthetic Digital Platforms: Various "tokenized US stock" platforms
• High Risk Warning: May face 100% loss with no protection mechanisms

Hidden Traps in Token Selection:

If investors insist on participating in tokenized US stocks, the first choice they face is: Which version of different tokens for the same stock should they choose?

Wrong Selection Logic: ❌ Price-Oriented: "This platform's Apple token is cheaper than that one"

• Risk: Price differences may reflect insufficient liquidity or technical issues
• Consequence: Cheaper tokens often mean higher risks

❌ Volume-Oriented: "This platform has higher trading volume"

• Risk: Trading volume may be artificially manipulated
• Consequence: High trading volume doesn't equal high security

❌ Feature-Oriented: "This platform supports more functions"

• Risk: Complex features often mean more technical vulnerabilities
• Consequence: More features, more risk points

Correct Evaluation Framework:

✅ Platform Credit Assessment:

• Operation history and team background
• Regulatory compliance level
• Historical security incident handling

✅ Technical Security Verification:

• Smart contract audit reports
• Fund segregation mechanisms
• Emergency situation handling plans

✅ Liquidity Quality Analysis:

• Stability of bid-ask spreads
• Price impact of large transactions
• Performance under extreme market conditions

Real Cases of Cross-Platform Risk:

Case One: FTX Token Zeroing Event When FTX collapsed, all stock tokens it issued instantly went to zero, while tokens with the same name on other platforms continued trading, creating huge price differences. Investors holding FTX version tokens suffered heavy losses.

Case Two: Severe Token Price Deviation A Tesla token on a small platform was priced 30% below the real stock due to insufficient liquidity. While it seemed cheap, it actually reflected the platform's credit risk.

Uncle Haowai's Professional Advice:

For Must-Participate Users:

• Use only a very small proportion of funds (no more than 5% of total assets)
• Choose platforms with the strictest regulation and longest history
• Regular evaluation and position adjustment
• Establish clear stop-loss mechanisms

For Rational Investors: Avoid all tokenized US stocks and choose traditional broker channels. In investment, difficulty in choosing often means all options are inadequate. When you need to choose among multiple risky options, the best choice might be not to choose.

Platform Verification Checklist (Upgraded Version):

✅ Basic Compliance Check:

• License verification from authoritative institutions like SEC/FCA/MAS
• Regulatory status confirmation of custodial institutions
• Detailed terms of insurance protection

✅ Technical Security Assessment:

• Third-party security audit reports
• Code open-source level and community review
• Historical security incidents and handling methods

✅ Operational Transparency:

• Real-time reports of asset custody
• Proof of user fund segregation
• Regular financial audit disclosures

✅ User Rights Protection:

• Dispute resolution mechanisms
• Asset protection in emergency situations
• User fund recovery pathways

V. Common Misconceptions: Why "Instant Execution with Sufficient Depth" Makes You Fall into Traps

5.1 Technical Truth of Execution Speed: Millisecond Differences Expose the Nature

Technical Path of Real US Stock Trading:

1. Order Transmission: From broker system to exchange (2-5 milliseconds)
2. Exchange Matching: Finding counterparties in order books (1-10 milliseconds)
3. Execution Confirmation: Exchange returns execution information (2-5 milliseconds)
4. Clearing and Settlement: Complete fund and stock delivery through DTCC system (T+2)

Total technical latency: 5-20 milliseconds, already the limit speed for high-frequency trading.

Platform "Instant Execution" Implementation:

• Internal database query (<1 millisecond)
• Account balance update (<1 millisecond)
• Return "execution" confirmation (<1 millisecond)

Total time: <3 milliseconds, but this is not real market trading.

5.2 Data Comparison Analysis of "Liquidity Depth"

Apple Stock (AAPL) Real Market Data (2024 average):

• Daily average trading volume: 45 million shares
• Bid-ask spread: $0.01-0.03 (normal trading hours)
• Pre/post-market spread: $0.05-0.15
• Average slippage for large orders (100K+ shares): $0.02-0.08

Platform-Displayed "Depth" Characteristics:

• Claims of "unlimited liquidity"
• Bid-ask spreads always maintain minimum values
• 24-hour consistent spreads, unaffected by time periods
• "Zero slippage" guarantee for large trades

Data Abnormality Analysis: Real market liquidity is affected by multiple factors: trading hours, market sentiment, sudden events, etc. Any platform claiming "perfect liquidity" violates basic market operation principles.

5.3 Risk Identification and Self-Protection

Key Risk Signals:

• Promoting "zero slippage" trading
• Claiming "unlimited liquidity"
• 24/7 US stock trading
• Trading fees that are "too good to be true"

Self-Protection Strategies:

• Prioritize traditional licensed brokers
• Understand real market trading mechanisms
• Focus on fund safety and regulatory protection
• Avoid being misled by marketing concepts

VI. 2025 Regulatory Outlook: Standardization Trends in Digital Asset Investment

6.1 Global Regulatory Tightening Signals

Since 2024, major global financial regulators have been strengthening regulation of the digital asset sector:

United States: SEC strengthened enforcement against unregistered securities, requiring multiple crypto platforms to delist security-type tokens.

European Union: MiCA (Markets in Crypto-Assets Regulation) officially implemented, proposing clear compliance requirements for tokenized securities.

Asia: Financial centers like Hong Kong and Singapore are improving digital asset regulatory frameworks, raising entry barriers.

6.2 Improvement of Investor Protection Mechanisms

Regulatory trends indicate that future digital asset investment environments will be more standardized:

Transparency Requirements: Platforms must clearly disclose product nature, risk levels, and fee standards.

Fund Segregation: Client funds and platform proprietary funds must be strictly separated.

Dispute Resolution: Establish comprehensive investor complaint and compensation mechanisms.

6.3 Balance Between Technological Innovation and Compliance

True fintech innovation should improve service efficiency under compliance premises, not create arbitrage spaces by bypassing regulation. Future development directions worth watching:

• Compliant Tokenized Securities: Real asset tokenization under complete regulatory frameworks
• Cross-border Investment Facilitation: Using technology to reduce compliance costs and improve service efficiency
• Smart Advisory Services: Using algorithms to provide personalized asset allocation recommendations for investors

VII. From Theory to Practice: Building the Right US Stock Investment Path

7.1 Beginner Action Plan

Step One: Establish Correct Understanding

• Clarify investment goals: Long-term wealth growth or short-term speculation
• Learn basic knowledge: Understand basic financial instruments like stocks, ETFs, bonds
• Risk assessment: Objectively assess your risk tolerance

Step Two: Choose Compliant Platforms

• Prioritize traditional brokers' digital services
• Verify regulatory licenses and fund safety guarantees
• Compare fee structures and service quality

Step Three: Develop Investment Strategy

• Start with broad-based index funds (like SPY, QQQ)
• Use dollar-cost averaging to spread timing risk
• Set reasonable expected returns (6-10% annually)

7.2 Advanced Strategy Recommendations

Asset Allocation Optimization:

• Control US stock proportion to 30-50% of total assets
• Pay attention to exchange rate risks and tax implications
• Regular portfolio rebalancing

Tool Usage Upgrade:

• Learn to use professional analysis software (like TradingView - Professional technical analysis tools)
• Follow authoritative research reports (Goldman Sachs, Morgan Stanley, etc.)
• Build your own investment decision framework

Risk Management Enhancement:

• Set stop-loss strategies
• Diversify investments to avoid over-concentration
• Maintain appropriate cash reserves

As Uncle Haowai's observation summary over the years: True investment success comes from deep market understanding and long-term persistence, not blind pursuit of so-called "innovative tools". Platforms promoting "making money while sleeping" and "zero risk, high returns" are often the biggest risks.

Conclusion

The popularity of tokenized US stocks reflects investors' desire for convenient and efficient investment tools, but also exposes the lack of financial literacy. Through our in-depth analysis, several key conclusions can be drawn:

Technical Implementation Complexity is Severely Underestimated: Whether platforms independently issue tokens or pursue unified standards, they all face multiple challenges including liquidity fragmentation, technical governance, and regulatory compliance. True "1:1 correspondence" is far more complex than it appears on the surface, requiring comprehensive custody, audit, and regulatory systems.

Institutional Differences in Fund Protection are Severely Ignored: Many investors are attracted by the technical convenience of tokenized US stocks but completely overlook fundamental differences in fund protection. Traditional brokers' SIPC insurance, client fund segregation systems, and regulatory audit systems provide multiple protection layers for investors. Digital platforms' "zero insurance" status means: Once platforms have problems, your funds may face 100% loss with no safety net.

Dangerous Misleading of "Crypto and Stocks are One Family": This statement masks essential differences between traditional stock investment and tokenized products. Traditional stocks enjoy real company ownership and complete regulatory protection, while tokenized US stocks are essentially certificates issued by platforms, with investor rights entirely dependent on platform credit.

Unsustainability of Regulatory Arbitrage: Current "advantages" claimed by some platforms (such as bypassing US regulation, tax avoidance, etc.) are actually built on regulatory gaps. As regulatory policies tighten in various countries, these "advantages" may instantly transform into huge risks.

Choice Difficulty Reflects Fundamental Problems: When investors need to choose among multiple tokens with the same name or require complex verification procedures to confirm platform credibility, this itself indicates the immaturity of such products. Truly good investment products should make choices simple, not complex.

Remember, when an investment opportunity seems "too good to be true," it usually is not true. While pursuing investment returns, protecting principal safety is always the top priority.

For mainland Chinese investors, participating in such investments involves even more complex risks: "black money" risks from P2P exchanges, bank account freezing, and severe crackdowns under the new Anti-Money Laundering Law, all of which could escalate economic losses into legal risks.

True investment wisdom lies in: choosing transparent, compliant, and sustainable investment paths, rather than being misled by marketing gimmicks packaged as "innovation". Traditional finance may seem "boring," but its risk control and investor protection mechanisms, refined over a century, are incomparable to these emerging models.

In the investment world, boring often means safe, while excitement often comes with risks you cannot afford. Choose traditional but reliable investment methods, let time and compound interest become your best friends—this is the wise choice for ordinary investors.

I hope this analysis helps you build clearer investment understanding. If you have more questions, welcome to discuss with me in the comments section.

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I am Uncle Haowai, focused on interpreting investment wisdom with data and logic, providing valuable financial knowledge for ordinary investors. Investment carries risks; enter the market with caution. This article is for educational sharing only and does not constitute investment advice. Welcome to follow Uncle Haowai as we advance together on the path of rational investment.