TOKENIZATION OF PRIVATE COMPANIES

OpenAI is reportedly targeting a $500 billion valuation, making it the world’s most valuable private company—surpassing SpaceX—and highlighting growing investor appetite for cutting-edge private firms. Traditionally off-limits to ordinary investors due to regulatory barriers, access to such companies may now be possible through tokenization: blockchain-based tokens that mirror private share performance, offered by platforms like Robinhood and Republic. While proponents hail this as a democratizing breakthrough—similar to how the internet transformed commerce—critics warn that these tokens are not actual equity, lack shareholder rights, and operate in a regulatory gray area. OpenAI itself has disavowed tokenized shares, underscoring the risks of speculation without ownership or transparency. Experts urge retail investors to exercise extreme caution, perform thorough due diligence, and understand that while tokenization could unlock unprecedented access to high-growth assets, it remains an untested frontier fraught with potential for fraud and uncertainty.

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