Galaxy Researcher says Coinbase's tokenized stock offering may rely on offshore wrapper structures, raising questions around shareholder rights, custody, and regulation

Galaxy Digital research associate Brandon “intangiblecoins” Green has raised concerns that Coinbase’s planned offshore tokenized U.S. stock offering may in practice rely on an intermediary or “wrapper” structure, rather than giving token holders direct legal title to the underlying shares. Coinbase has announced that, starting next month, it will offer 24/7 trading of tokenized U.S. equities to non‑U.S. customers, describing the tokens as 1:1 backed by real stocks and promising “true equity ownership,” dividend payouts, and full shareholder rights. Green’s post questions how those rights will actually be implemented if the legal ownership of the stock is held by a special‑purpose vehicle, trust, or offshore affiliate, with users only holding a claim on that entity rather than the underlying shares themselves. The issue matters because the exact legal and custody structure of tokenized stocks determines whether investors genuinely receive shareholder protections, voting rights, and direct recourse under securities law, or only economic exposure similar to a CFD, swap, or depositary receipt. Ledger Insights and other analysts have noted that Coinbase’s tokenized stock product will be offered offshore, not by its existing U.S. broker‑dealer or parent company, and will likely route through licensed entities in jurisdictions such as the EU under MiFID II or other non‑U.S. regimes. That suggests use of a wrapper or custodial structure where a Coinbase entity or partner custodies the underlying equities and issues onchain tokens, potentially raising questions around segregation of assets, bankruptcy treatment, regulatory oversight, and how corporate actions (voting, tender offers, class actions) will be passed through to token holders. Green’s critique sits within a broader debate about how tokenized real‑world assets should be structured so that onchain instruments remain within securities law frameworks while delivering the programmability and 24/7 access touted by exchanges. Commentators highlight that different approaches—such as equity swaps, synthetic trackers, or fully backed wrappers—carry very different regulatory implications for retail access, especially in the U.S., where Coinbase’s product will not initially be available. The discussion around Coinbase’s design choices is therefore less about the technology and more about whether tokenized stocks will function as a genuine extension of traditional capital markets onto public blockchains, or as a more limited offshore product with constrained investor protections and complex jurisdictional risk.

✨ AI-generated background, compiled from web sources — not editorial content.

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