Expert calls SEC delay on tokenized stocks a positive step

According to CoinDesk, a security infrastructure expert has described the U.S. SEC's delay in approving tokenized stocks as a positive move for investor protection. The expert, Chamarajnagar, argued that the issue lies not with tokenization itself but with the existing compliance framework, which is incapable of handling real-time trading. He asserted that a next-generation regulatory and surveillance system is needed to understand transactional context before U.S. stocks are tokenized. Citing the Lazarus Group's money laundering via Tornado Cash, the misuse of customer funds at FTX, and the Mango Markets exploit, he explained that fraud occurs within the context of transactions, not in the code. To ensure the safe growth of the tokenized securities market, Chamarajnagar stressed the need for a "Cognitive Compliance" framework. This would involve real-time regulatory data collection, analysis of relationships between wallets, exchanges, and assets, detection of anomalous transactions, and dynamic risk assessment. He warned that tokenizing U.S. stocks without adequate preparation could trigger a crisis larger than the collapse of FTX and urged that the time granted by the SEC's delay must not be wasted. The U.S. SEC previously announced its decision to postpone plans to allow the trading of tokenized stocks.