Experts warn tokenizing DAT stocks increases volatility, legal uncertainty, and liquidity risk in crypto-linked equities.
Author: Akshat Thakur
October 5, 2025 — The debate around tokenizing DAT stocks has intensified as crypto executives warn that issuing tokenized shares of digital asset treasury (DAT) companies could compound investor risks.
Digital Asset Treasury (DAT) companies that tokenize their stocks are exposing investors to added risk, according to industry leaders. Komodo CTO Kadan Stadelmann said that blockchain’s 24/7 trading structure allows sharp price swings to happen outside traditional market hours, leaving firms unable to react in time.
“Blockchains trade 24/7, whereas traditional markets have specific hours,” Stadelmann told Cointelegraph. “That creates exposure gaps that corporate treasuries aren’t designed to handle.”
These companies already deal with high crypto volatility. Tokenizing their equity ties their corporate value even more directly to on-chain movements, compounding risk during downturns.
Kanny Lee, CEO of SecondSwap, said tokenized DAT stocks create “a synthetic on top of a synthetic.” Investors face volatility from both the crypto holdings of the company and the tokenized shares themselves. “Investors end up exposed twice, once to the volatility of the treasury’s crypto and again to the complexity of corporate equity and regulation,” he explained.
Analysts note that while tokenization increases transparency and accessibility, it also opens new attack vectors from smart contract bugs to wallet breaches that can impact both investors and company treasuries.
The US SEC is studying blockchain-based stock trading as part of a modernization plan. Regulators have hinted at 24/7 capital markets but stopped short of issuing clear rules. Nasdaq and the NYSE are also exploring round-the-clock equity trading to compete with crypto liquidity.
However, tokenized DAT stocks sit in a legal grey zone, with overlapping securities, tax, and compliance risks that remain undefined.
Tokenizing DAT stocks may democratize access and efficiency, but it magnifies systemic risks if not properly regulated. Experts suggest strong oversight, multi-layered audits, and circuit breakers for 24/7 trading environments.
Until then, investors face amplified exposure not just to crypto, but to the experiment of blending corporate finance with blockchain infrastructure.
Market analysts are drawing parallels between the current wave of tokenizing DAT stocks and the speculative mania of the early 2000s dot-com boom. Just as startups then rushed to list without sustainable models, many DAT firms today tokenize equity without clear governance frameworks or revenue stability.
The rapid tokenization trend mirrors how internet companies once leveraged hype to inflate valuations only to see them collapse when fundamentals lagged. Experts warn that unchecked growth in tokenized equity markets could repeat those historical pitfalls if regulations and investor safeguards don’t evolve quickly enough.
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