A recent Reuters article ("Crypto race to tokenize stocks raises investor protection flags," Oct 8, 2025) highlights a fast-growing but risky trend: the emergence of "wrapper-based" tokenized stocks — blockchain tokens that mimic the value of equities without actually representing ownership.
This is precisely the model that Ohanae's regulated tokenized equity framework was designed to move beyond.
The Problem: Synthetic "Stock Tokens"
Many crypto companies are rushing to offer "tokenized shares" that are pegged to real stocks — from Tesla to Nvidia — yet these products often don't confer actual ownership, voting rights, or dividends.
Instead, they function more like derivatives, exposing investors to counterparty risk, inconsistent rights, and limited transparency.
As Reuters reports, these tokens are often issued by third parties through offshore entities, with structures and disclosures that vary widely. Investors are, in effect, buying exposure — not equity.
The Ohanae Approach: Real Securities, On-Chain
At Ohanae, we take a fundamentally different route. Our tokenized equities are true digital asset securities — issued, owned, and traded directly on the blockchain under SEC and FINRA oversight through Ohanae Securities LLC, a Special Purpose Broker-Dealer (SPBD) pending FINRA approval.
Each token represents actual shares in a company, not synthetic exposure. The token itself is the legally recognized equity interest — complete with voting, dividend, and ownership rights embedded via smart contracts.
Ohanae vs. Wrapper Tokens: A Side-by-Side Comparison
| Aspect | Ohanae Tokenized Equities | Wrapper / Synthetic Tokens |
|
Underlying Asset |
Real shares issued directly on-chain under SEC/FINRA oversight | Derivative-like exposure, not actual ownership |
| Legal Structure | Recognized as securities under U.S. law | Contractual “wrappers” issued by intermediaries |
| Ownership | Token holders are real shareholders with voting and dividend rights | Investors hold a claim on the issuer, not the stock |
| Regulation | Fully compliant with Exchange Act, Securities Act, CLARITY Act / FRIA | Often offshore or unregulated; gray area under U.S. law |
| Custody | On-chain custody under SEC Custody Rule, managed by SPBD | Third-party or offshore custody with counterparty risk |
| Settlement | Instant (T+0) blockchain settlement reflected in company ledger | On-chain transfer but no legal change of ownership |
|
Investor Protections |
Full disclosures, audited cap tables, KYC/AML compliance | Limited or inconsistent protections |
| Transparency | Real-time on-chain shareholder registry | Opaque collateral and derivative structures |
|
Market Integrity |
Regulated platform; corresponds to real securities | Fragmented, unregulated, and potentially unstable |
Why It Matters
The distinction between tokenized securities and synthetic exposures is more than semantics — it's the difference between investor protection and counterparty risk, legal ownership and imitation, regulation, and gray zones.
Ohanae's on-chain equity framework is built to uphold the same investor protections that exist in traditional markets, while unlocking the benefits of blockchain: 24x7 trading, instant settlement, and transparent ownership.
Real Tokenization, Not Representation
Ohanae = On-chain securities — real shares issued and traded digitally under U.S. regulatory compliance.
Wrapper tokens = Synthetic exposure — derivative-like products that mimic equity without delivering its rights or protections.
Our mission aligns with the SEC Project Crypto mandate: to bridge traditional securities law and blockchain innovation, ensuring that crypto assets securities evolve within — not outside — the framework of investor protection and market integrity.
The Bottom Line
Tokenization will transform capital markets — but only if it's done the right way.
That means real ownership, regulated issuance, and transparent governance.
At Ohanae, we're building that future.
Read the original Reuters article here: Crypto race to tokenize stocks raises investor protection flags – Reuters, Oct 8, 2025
Disclaimer
Ohanae Securities LLC is a subsidiary of Ohanae, Inc. and member of FINRA/SIPC. Additional information about Ohanae Securities LLC can be found on BrokerCheck. Ohanae Securities LLC is in discussions with FINRA about exploring the expansion of business lines for the broker/dealer. Any statements regarding abilities of Ohanae Securities LLC are subject to FINRA approval and there are no guarantees FINRA will approve the broker/dealer's expansion.
Ohanae Securities is seeking approval to be a special purpose broker-dealer that is performing the full set of broker-dealer functions with respect to crypto asset securities – including maintaining custody of these assets – in a manner that addresses the unique attributes of digital asset securities and minimizes risk to investors and other market participants. If approved, Ohanae Securities will limit its business to crypto asset securities to isolate risk and having policies and procedures to, among other things, assess a given crypto asset security's distributed ledger technology and protect the private keys necessary to transfer the crypto asset security.