Crypto bros say they’re rebuilding Wall Street on-chain. They say tokens tied to real-world shares like Nvidia, Apple, and even Elon Musk’s Tesla can make global investing easier, but the second you start paying attention, it’s just chaos, fake prices, legal headaches, and zero guardrails.
At the end of June, Robinhood, Kraken, Gemini, and Bybit introduced blockchain versions of American stocks and ETFs for users outside the U.S. Robinhood tried to steal the show with a dramatic event in France. They even themed it after a Hitchcock film.
But things didn’t go as planned. Their tokens, built for companies like OpenAI and SpaceX that haven’t even gone public, triggered a backlash. OpenAI responded immediately on social media: “We did not partner with Robinhood, were not involved in this, and do not endorse it.” Lithuania’s central bank, which regulates Robinhood’s European operations, contacted the company for clarification.
Wild price swings hit tokenized stocks hours after launch
On July 3, the AAPLX token—meant to reflect Apple’s stock—hit $236.72, a 12% premium above Apple’s actual price. The Amazon token, AMZNX, spiked to $891.58 just two days later—four times higher than Amazon’s last close.
But the biggest dislocation happened that same week on Jupiter, a peer-to-peer trading platform. A single trader tried to buy $500 worth of AMZNX, and that alone sent the token to $23,781.22. That’s over 100x Amazon’s real value.
All these tokens were issued by Backed Finance, a Swiss company that rolled them out on June 30 through partnerships with Kraken and Bybit. Backed calls them “xStocks” and claims they’re backed one-to-one with real stocks.
When people buy more tokens, the company buys more shares. When people sell, they burn tokens and dump the shares. The idea is that token prices should stay close to the real ones. But in reality, these tokens are barely traded.
Liquidity is weak, and a small trade is enough to throw off the price completely, especially on weekends, nights, or holidays when the stock market is shut.
A Backed spokesperson allegedly told the Journal that: “We are actively tracking any of these price dislocations and engaging with exchanges to make sure they work to fix this and follow best practices to make sure this does not happen.” But crypto isn’t known for its “best practices,” especially when trades happen on anonymous platforms.
Lack of oversight opens doors for abuse
The U.S. stock market relies on strict controls. Brokerages verify identities. Exchanges monitor trades. Regulators track suspicious activity. That entire system doesn’t exist here. Backed’s xStocks are “permissionless.”
That means they can move between wallets and platforms with zero friction. Kraken might log identities, but Jupiter doesn’t. Once tokens move to a decentralized platform, they’re completely off the radar.
Gemini co-founder Cameron Winklevoss argued, “By tokenizing equities, we believe we can export U.S. capital markets anywhere in the world.” But that dream ignores the core problem, which is that stocks traded without transparency or regulation invite disaster. Sure, the blockchain makes transactions public, but names and faces can be permanently hidden, as we’ve seen with North Korea’s Lazarus Group. They might not even be North Korea at all, because we have no way of knowing for sure. And that’s exactly how insider trading and pump-and-dump schemes thrive.
Carlos Domingo, CEO of Securitize, called it like it is: “It’s a can of worms and it is going to explode at some point, because people will find ways to do something illegal with these tokens.”
And that’s the real risk here. These tokens might look like progress, but they also make it easier for market abuse to go undetected. And there’s zero sign that this was a one-time thing.
