Michael Burry says the SEC’s plan to trade crypto-like stocks could create a nightmare for investors
The Securities and Exchange Commission (SEC) has a plan to allow people to trade shares on the blockchain, buying and selling them as crypto.
“Big Short” investor Michael Burry is not happy about that, to say the least.
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“It’s possible we’re looking fully into the Snow Crash cyber-punk future,” Burry said this week in his Substack, Cassandra Unchained (1). “This would be a point in time that should be stopped from moving forward by someone in the future.”
If the plan goes ahead, shares can be tokenized without the company’s approval and traded 24/7, unlike the US stock market, which opens at 9:30 am ET and closes at 4 pm ET on weekdays only.
Burry isn’t the only big name in investing against stock tokens. Citadel Securities, a major brokerage firm, sent a letter to the SEC backtracking on the plan in December 2025 (2).
Here’s what this change will mean for both companies and consumers.
Isolation can be a big problem for tokenized stocks
Bloomberg reports that there will be two types of tokenized shares under the SEC’s new “innovation exemption” plan: shares that companies tokenize themselves or authorize tokenization, and shares that are tokenized by third parties without the company’s permission (3).
Stocks tokenized by third parties may not carry all the attributes that stocks normally come with, such as voting rights and dividends. On the other hand, you will get instant proof of identity backed by blockchain.
“Tokens may not represent the true ownership of the company, and token holders may not receive all the benefits of the share,” Daniel Labovitz, CEO of Green Impact Exchange (4), told Business Insider.
Token stocks can also cause divergence, Labovitz says: “When the same security trades on different unconnected markets, the prices of the assets can vary, meaning some buyers will pay more for their tokens.”
This is especially possible since the crypto markets are open 24/7, while the stock market operates under very limited hours. That gives both markets plenty of time to desynchronize.
Citadel Securities also expressed concern about the split in their letter to the SEC.
“Although the rules governing the system of national markets can continue to be adjusted, facilitating the emergency of the US equity market “shadow” … would allow US shares and tokens to trade completely outside the country’s market system, financial separation and undermining the main investor protection,” it said.
