[EU Regulators Warn: Tokenized Stocks May Mislead Retail Investors] According to Cryptoslate, Natasha Cazenave, Executive Director of the European Securities and Markets Authority (ESMA), stated that tokenized stocks, as a new type of digital asset, are priced based on the stock prices of listed companies but may create a false perception of ownership among investors, thereby undermining market confidence. Cazenave warned that many tokenized stock products currently being promoted in the EU do not grant investors actual shareholder rights, such as voting rights or dividend distribution rights. She noted that due to the lack of transparency in how these assets are presented, retail investors might mistakenly believe they own company stocks when, in fact, they do not. Cazenave emphasized that while tokenization offers features such as fractional trading and 24/7 market access, the absence of ownership rights poses "specific risks of investor misunderstanding." Proponents argue that tokenization can drive financial modernization by reducing costs and broadening access to assets (ranging from stocks and bonds to real estate). Cazenave acknowledged this potential but pointed out that most existing projects are currently small in scale, lack liquidity, and fall far short of delivering the efficiency gains claimed by supporters.