The Securities and Exchange Commission (SEC) has a plan to let people trade stocks on the blockchain, buying and selling them like crypto.
“Big Short” investor Michael Burry isn’t happy about that, to say the least.
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“We may be headed full-on to a Snow Crash cyber-punk future,” said Burry this week on his Substack, Cassandra Unchained (1). “This may be the point in time that needs to be stopped from going forward by some future being.”
If the plan goes through, stocks could be tokenized without a company’s consent and traded 24/7, unlike the U.S. stock market, which opens at 9:30 a.m. ET and closes at 4 p.m. ET on weekdays only.
Burry isn’t the only big name in investing that’s against stock tokenization. Citadel Securities, a major trading firm, sent a letter to the SEC pushing back against the plan in December 2025 (2).
Here’s what the change would mean for both companies and consumers.
Fragmentation could be a major problem for tokenized stocks
Bloomberg reports that there will be two types of tokenized stocks under the SEC’s new “innovation exemption” plan: stocks that the companies tokenize themselves or authorize to be tokenized, and stocks that are tokenized by third parties without the company’s consent (3).
Third-party tokenized stocks might not carry all of the privileges that stocks normally come with, such as voting rights and dividends. On the other hand, you would get immediate proof of ownership backed by the blockchain.
“The tokens may not represent actual ownership of the company, and token holders may not get all the benefits of the share,” Daniel Labovitz, CEO of Green Impact Exchange (4), told Business Insider.
Tokenized stocks could also cause fragmentation, Labovitz says: “When the same security trades in different markets that aren’t connected to each other, the price of assets can diverge, meaning that some buyers will overpay for their token.”
This is especially likely since crypto markets are open 24/7, while the stock market operates under much more limited hours. That gives the two markets plenty of time to get off-sync.
Citadel Securities also voiced concerns about fragmentation in their letter to the SEC.
“While the rules governing the national market system can continue to be finetuned, facilitating the emergency of a “shadow” U.S. equity market… would allow tokenized U.S. equities to trade completely outside of the national market system, fragmenting liquidity and undermining core investor protections,” it said.
