Issues arising from SpaceX's tokenization

Last Friday's listing of SpaceX sparked a frenzy of subscriptions in the traditional stock market. Taking advantage of this opportunity, some crypto exchanges have specifically offered alternative ways for crypto users to participate: allowing participants to purchase tokenized SpaceX shares. With such a strong theme as SpaceX and the high popularity of the crypto ecosystem, CEX's move has greatly attracted attention. I see this move as a rare opportunity in recent times to test the practical application of tokenized stocks (RWA). However, in practice, a common situation has arisen at many CEXs: exchanges are forced to partially or even fully refund participating users because they cannot obtain enough shares. After this unexpected situation was exposed, another detail that had long been overlooked was also brought to light: some so-called tokenized stocks listed and traded on CEXs are not actually real stocks. They do not have the rights inherent to stocks, such as voting rights and dividend rights, but are merely tokens linked to stock prices. Whether it's the inability to provide sufficient shares or the fact that some tokenized shares aren't actually real shares, the core issue they reflect is the same: Many of these tokenized assets lack genuine rights protection. This problem is the key to jeopardizing the vitality of these assets. In my opinion, the success of RWA doesn't lie in the technology, but in whether its centralized regulatory framework can be successfully implemented. If regulation is inadequate and cannot guarantee the equivalence of rights between tokenized assets and the "real" assets they represent, then the so-called RWA assets are merely empty shells and will inevitably collapse. Once regulation is involved, ordinary users will have to deal with many intricate issues. Let's take tokenized stocks as an example to roughly outline which aspects might involve regulation. Some US-listed companies (such as Apple) pay cash dividends. For cash dividends, US tax residents are required to pay taxes according to US law, while tax residents of other countries must pay taxes according to the tax regulations of their respective countries. When the stock of such companies is tokenized, regulators must intervene to ensure that the tokenized shares have the same rights. When these companies distribute cash dividends, how are these dividends delivered to CEXs or token trading platforms? Is it in US dollars or stablecoins? This area is currently a regulatory gray area. If it's cash, how do token holders transfer their tokens out? Which bank cards are used, and what tax rules should they be aware of? If it's a stablecoin, how should cash dividends received in stablecoin form be taxed? This is a regulatory gray area in many countries. The above are the regulatory details and tax issues that may arise under the assumption that all users are legitimate. To become a legitimate user, KYC (Know Your Customer) is an essential step. Once KYC (Know Your Customer) is implemented, it becomes impossible to escape regulation, and many users may even be automatically blocked. All of these are things users should carefully consider before participating. In a previous article discussing the listing of US stocks on major exchanges, I didn't share a point due to space limitations: Whether or not CEX can list US stocks is not fundamentally a technical issue, but a regulatory one. Regarding the business opportunity of attracting crypto users to participate in tokenized US stock trading, I believe that all exchanges except the largest one can see it. But why is only the largest exchange making such a big move, while other exchanges are more cautious? I think the key lies in regulation. Some CEXs are boldly skirting the line, while others are proceeding cautiously. If the definition of crypto assets varies significantly across countries and there are regulatory differences, thus allowing for gray areas, then stock trading is clearly regulated and scrutinized in all countries, leaving little room for gray areas. Before regulations are finalized and the details regarding these regulations are clear, users need to be aware of the risks when participating in such transactions.