Digital asset treasury (DAT) companies face increased risks when tokenizing stocks on the blockchain. Blockchains trade 24/7, unlike traditional markets, leading to potential price volatility outside of market hours. Tokenized stocks have reached $1.3 billion in value, but smart contract vulnerabilities and hacking risks compound the danger for investors and companies.

The US SEC and stock exchanges are exploring blockchain-based stock trading to modernize the legacy system. The SEC is considering allowing regulated retail crypto exchanges to offer tokenized stock trading. Nasdaq president Tal Cohen has announced plans for 24-hour stock trading, following the push for expanded trading hours by traditional exchanges like Nasdaq and NYSE.

Tokenized stocks are gaining popularity, with dozens of companies now offering tokenized shares. However, regulatory uncertainty leaves tokenized stocks in a grey area. The lack of legal clarity and the double exposure to crypto volatility and corporate equity risks pose challenges for investors. The SEC’s push for tokenized equities and round-the-clock trading faces unclear benefits for the crypto industry.

Read more at Cointelegraph: Tokenized Crypto Treasury Companies Magnify Risks of Volatile Assets: Execs