ESMA: Stock-Backed Crypto Tokens Could Mislead Investors

Written by Aaron S.,

Editor-In-Chief

Last Updated: September 02, 2025

Key Takeaways

ESMA's Natasha Cazenave warned that stock-linked crypto tokens may mislead users by lacking real shareholder rights like voting or dividends;
She stressed the need for clear messaging around these products, especially when they do not provide actual ownership of underlying assets;
While ESMA supports innovation, it emphasized that tokenization must follow strong legal rules to protect users and market stability.

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Natasha Cazenave, executive director at the European Securities and Markets Authority (ESMA), has raised concerns about crypto tokens linked to stock prices.

She stated that they may be giving people the wrong impression about what they actually own.

Speaking at a conference in Dubrovnik, Croatia, Cazenave explained that these tokens, while offering benefits such as continuous trading and the ability to buy in small portions, typically do not come with any legal ownership rights.

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This means that holders of such tokens are not entitled to vote, receive dividends, or participate in shareholder meetings.

Cazenave emphasized the importance of clear information and warnings to prevent confusion. She stated that it is necessary to explain the risks and limitations of these products, especially when they are designed in ways that do not grant full shareholder status.

While supportive of innovation, ESMA made it clear that investor safety comes first. Cazenave said new technology should be developed in a way that does not put users or financial markets at risk.

If done under proper legal rules, tokenization could improve cross-border operations, lower costs, and make financial systems more transparent.

She also mentioned the EU’s blockchain pilot, which allows companies to test digital tools under flexible rules. Insights from that program, as well as from the EU’s Markets in Crypto-Assets (MiCA) regulation, will guide future steps in regulating tokenized assets.

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