Issuer and counterparty risk
Your token is usually only as good as the company that issued it. If the issuer becomes insolvent, token holders may rank as creditors and recover less than the share value.
Custody risk
Backing assets are held by custodians. Ask who they are, where they are regulated and whether assets are segregated from the issuer's own.
Liquidity risk
Tokens may have thin markets, especially outside US trading hours, so you may not be able to sell at a price close to the underlying share.
Smart-contract and network risk
Bugs, hacks, network outages or lost private keys can result in losses that cannot be reversed.
Regulatory risk
Rules are evolving. A product available today can be restricted tomorrow, and platforms may close accounts in jurisdictions they no longer serve.
Want to try it?
Pump.fun lets you buy tokenized US stocks like Tesla and Micron with USDC, Apple Pay or a card.
Referral link: we get part of the trading fee. Details. Not available in the UK, Russia and some other countries.
Sources
- 1.IOSCO — Policy work on crypto and digital assets
International Organization of Securities Commissions · reference
- 2.ESMA — Crypto-assets and investor warnings
European Securities and Markets Authority · regulator
Last updated .