U.S. · New York · Cointelegraph
The regulator said tokenized equities remain negligible compared with global stock markets but are gaining traction
Compiled by KHAO Editorial — aggregated from 1 source. See llms.txt for citation guidance.
◌ Single Source
ESMA also flagged prediction markets as an emerging risk, warning of heightened concerns around insider trading and market manipulation.
Key facts
- The Commodity Futures Trading Commission (CFTC) has issued guidance for prediction markets throughout 2026 while defending what it says is its exclusive jurisdiction over federally regulated event
- In its latest risk monitoring report published Thursday, the European Securities and Markets Authority (ESMA) called for closer monitoring of the “growing linkage between increasingly vulnerable crypto-asset markets and the broader financial system
- The agency has even sued several states, including Kentucky, Minnesota, New Mexico, New York, Illinois and Connecticut, after authorities sought to apply state gambling laws to prediction market
- ESMA also flagged prediction markets as an emerging risk, warning of heightened concerns around insider trading and market manipulation
Summary
The EU securities regulator flagged tokenized equities, DeFi exploits and prediction markets as areas where growing crypto ties could pose risks to the broader financial system. Europe’s securities regulator has warned that growing links between crypto and traditional finance could increase the risk of shocks spreading across the broader financial system. In its latest risk monitoring report published Thursday, the European Securities and Markets Authority (ESMA) called for closer monitoring of the “growing linkage between increasingly vulnerable crypto-asset markets and the broader financial system.” ESMA pointed to growing adoption of tokenized equities and recent decentralized finance (DeFi) exploits as areas that could deepen links between crypto and traditional markets and increase the potential for financial spillovers. The regulator said tokenized equities remain negligible compared with global stock markets but are gaining traction, potentially introducing new participants and infrastructure that could reshape market structure.