A cautionary note for investors on the FCA’s latest push toward digital asset markets
The FCA’s enthusiasm for asset tokenisation — representing ownership of real-world assets on distributed ledgers — is being marketed as a breakthrough for efficiency, accessibility, and innovation. But before we get swept up in the hype, investors should pause and ask a more fundamental question:
Does tokenisation actually reduce risk, or does it simply repackage it in a new and less transparent form?
⚠️ The Additional Risks of Tokenisation
Compared to outright ownership, tokenised assets introduce a stack of new risks that most investors don’t fully appreciate:
- Intermediary Dependence
- Tokenisation adds layers of technological and custodial intermediaries — platforms, protocols, smart contracts, and digital custodians — each introducing points of failure or fraud.
- True ownership becomes contingent on the integrity of code and counterparties, not a legal title deed.
- Legal Uncertainty
- Property rights over tokens are not yet settled in law. If a token platform collapses, who actually owns the underlying asset?
- Many tokenised structures blur the line between beneficial ownership and contractual claims, leaving investors potentially unsecured.
- Cybersecurity and Technology Risk
- Distributed ledgers can be immutable, but the systems built around them are not.
- Hacks, smart contract exploits, and private key losses remain persistent threats. Once compromised, recovery can be impossible.
- Liquidity Illusion
- “Fractional ownership” is often sold as enhanced liquidity, but secondary markets for tokenised assets are thin, volatile, and largely unregulated.
- Tokens may be transferable in theory, yet unsellable in practice.
- Regulatory Capture and Moral Hazard
- When regulators promote speculative innovation as consumer choice, we must ask: whose growth are they serving?
- If rules are shaped more by lobbying than by learning from past financial failures, the public becomes the testing ground for unproven markets.
🧠A Timeless Principle
If you don’t fully understand an investment — its risks, governance, and underlying structure — you should not be in it, no matter what a captured regulator or glossy prospectus tells you.
The lesson is simple but urgent: Technology doesn’t eliminate financial risk; it often obscures it behind a digital interface.
In the age of tokenisation, empowerment means education — not speculation.
Holistic Wealth Planners and individual investors alike must look beyond the narrative of innovation and see the deeper architecture of control beneath it.
About Get SAFE
Get SAFE (Support After Financial Exploitation) was born from a simple truth: too many victims of financial abuse are left to suffer in silence.
We exist for people like Ian Davis—for the ones who did everything right, only to be failed by the systems they trusted. We know that behind every vanished pension, every ignored complaint, and every stonewalled letter is a person—frightened, exhausted, and too often alone.
Get SAFE offers more than sympathy. We offer structure, support, and solidarity.
We provide a voice where there’s been silence, and clarity where there’s been confusion.
We stand beside those who have been exploited, not just to help them recover—but to help them reclaim their story and rebuild their future.
Because financial justice is not a luxury.
It’s a human right.
If you or someone you know has been affected by financial exploitation, we are here.
You are not alone.
Learn more at: Get SAFE (Support After Financial Exploitation).
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