Want to trade Amazon on a crypto exchange? The price might be off by 300%

Crypto companies have grand plans to reinvent the stock market using blockchain technology. They are off to a bumpy start.

- Alexander Osipovich & Vicky Ge Huang

Digital tokens designed to track popular stocks such as Amazon and Apple have deviated wildly from the price of the underlying shares since their launch two weeks ago. Robinhood Markets is facing scrutiny from its European regulator after it launched a token designed to let investors bet on OpenAI—without getting permission from the artificial-intelligence startup. And even some industry insiders fret that such "tokenized" stocks create opportunities for bad actors to engage in insider trading and market manipulation without getting caught.

In a flurry of announcements in late June, companies including Robinhood, Kraken, Gemini, and Bybit unveiled blockchain-based versions of U.S. stocks and exchange-traded funds for non-U.S. customers. Crypto executives hailed them as a way to let people worldwide invest in Tesla, Nvidia, the SPDR S&P 500 ETF, and other buzzy securities, especially in countries where it is difficult to buy U.S. stocks through a local brokerage.

"By tokenizing equities, we believe we can export U.S. capital markets anywhere in the world," said Gemini co-founder Cameron Winklevoss.

Tokenized stocks are part of a broader effort to rebuild traditional markets on the technology that underpins bitcoin and other digital assets. Investors can now buy tokens to bet on assets ranging from U.S. Treasurys to private-credit funds to shares of Elon Musk's SpaceX. Such experiments have proliferated in recent months as President Trump has installed crypto-friendly regulators and ended the Biden administration's enforcement-heavy approach to the industry.