ESMA Flags Tokenized Equities, DeFi Exploits as Risks to Traditional Finance

ESMA's focus on tokenized equities is notable because it treats them as a transmission channel, not just a niche product—the concern is about how stress in on-chain markets could reach conventional venues. DeFi exploits and prediction markets get similar framing, suggesting the regulator sees the connective tissue itself, rather than any single asset, as the risk. The open question is whether this stays a monitoring exercise or becomes the basis for formal measures; the answer will shape how tokenized-equity venues and DeFi protocols structure their EU-facing activity.