The Shocking 7 Days of Fund Withdrawal Issues: $6.2 Million Freezing Incident, A Warning for SMEs Regarding Equity RWA

1. The Imagination of 24/7 Trading: A New Window for Financing Small and Medium-sized Enterprises

Equity tokenization provides unprecedented financing channels for small and medium-sized enterprises. By splitting equity into digital tokens that can be traded on the blockchain 24/7, businesses can lower the barriers to financing and enhance capital liquidity. The introduction of smart contracts makes operations such as dividends and transfers more automated, increasing transparency and efficiency.

According to research by Yann Robard, a partner at Dawson Management, the value created in the private equity market over the past 25 years is about three times that of the public stock market during the same period. Many outstanding companies delay or even bypass going public, raising billions of dollars through multiple rounds of private financing. For example, OpenAI received $6.6 billion in investments from Microsoft, SoftBank, and other investors in October 2024, and completed a massive $40 billion financing round in March 2025, becoming the largest private financing case in history. This shows that sufficient financing support can allow companies to remain private for a long time or not go public, enabling more flexible strategic arrangements. Theoretically, equity RWA can extend this financing advantage to global investors, effectively addressing the issues of early-stage capital shortages and the inability to monetize brand value.

However, this convenient financing method is highly dependent on the stability and compliance of the platform. Once the platform encounters problems, investors' funds may be frozen, and the reputation of the business may be affected, potentially impacting future financing opportunities, ringing alarm bells for small and medium-sized enterprises.

2. 6.2 million dollars frozen: funds cannot be withdrawn for "Seven Days of Horror"

On August 7, the U.S. stock tokenization platform MyStonks announced an emergency upgrade, originally scheduled to be completed at 11:30 PM that night, but it ended up being delayed for 7 days. During this period, an investor publicly accused the platform of freezing his $6.2 million funds under the pretext of an "AML investigation," which quickly escalated into a crisis of trust. It wasn't until late at night on August 14 that the platform resumed withdrawal functions. The founder responded that this was a requirement from law enforcement rather than a decision made by the platform itself, but this claim has not been externally confirmed.

For investors, this is a thrilling experience of trapped funds; for small and medium-sized enterprises, such events serve as a warning. When choosing an equity tokenization platform, companies must assess the platform's stability and compliance capabilities; otherwise, if problems arise, the losses may not only affect investors' funds but may also directly impact the company's financing credibility and reputation.

3. $575,000 Filing and MSB License: Compliance ≠ Endorsement

Compliance qualifications are an important aspect for small and medium-sized enterprises to pay attention to when conducting equity RWA. MyStonks constantly emphasizes in its promotion that "we have an MSB license and have completed STO registration," but upon deeper analysis, it becomes evident that the actual protective effect of these qualifications is very limited.

According to data from the SEC's official website, the Form D submitted by MyStonks indicates that its registration type is a private placement exemption under Regulation D 506(c), with a total issuance scale of only $575,000, and an investment threshold starting at $50,000, limited to "accredited investors". In other words, this is just a small-scale private placement notification filing. The purpose of Form D is merely to inform the SEC that "I have conducted a private placement," and it does not imply that any operational license has been obtained, nor does it mean that the SEC endorses the company's qualifications or the authenticity of the project.

At the same time, the MSB license can also be easily misunderstood. The regulatory body for MSB (Money Services Business) is the FinCEN, which is under the U.S. Department of the Treasury, and its core responsibilities are anti-money laundering (AML) and counter-terrorism financing (CFT). It requires platforms to report suspicious transactions regarding the flow of funds, but it is not responsible for the safety of investors' funds and does not review the business models and technical implementations of the platforms.

For enterprises, if they mistakenly believe that having a record or license means absolute safety, they may overestimate the platform's ability to provide protection. If the platform's actual operations deviate from the record requirements, the enterprise may face investor scrutiny or compliance review.

IV. $50 million custody commitment: Black box under complex chain links

In addition to compliance qualifications, MyStonks also claims to have partnered with Fidelity to custody 50 million dollars in assets, covering 95 US stocks and 5 ETFs. On the surface, this seems to imply that asset safety is guaranteed, but upon closer examination of the details, several risk blind spots have been identified:

Lack of official confirmation: Fidelity has yet to publicly confirm its partnership with MyStonks for custody services.

Lack of third-party audits: The platform has not disclosed external audit reports or off-chain proof documents, and investors can only rely on the platform's self-reports.

Off-chain to on-chain mapping is opaque: MyStonks claims "1:1 mapping of US stocks", but lacks disclosure on how this is specifically achieved. In case the off-chain assets do not match the on-chain tokens, there is a risk of "tokens being valuable while assets are uncollateralized."

For enterprises, this "opaque custody chain" has a significant impact. Because in the eyes of investors, the platform chosen by the enterprise serves as a "endorsement." Once the platform's custody commitment is questioned, investors are likely to shift the blame to the enterprise itself, believing that the enterprise chose an unreliable platform, leading to financial risks. This situation not only damages the financing credibility but may also put the enterprise at risk of being labeled as "misleading investors."

5. The cost beyond 6.5 million USD: A necessary path from learning to practical application.

The MyStonks incident shows that the potential risks behind digital assets may far exceed the frozen 6.2 million dollars. For small and medium enterprises, attempting RWA on platforms lacking transparency and compliance guarantees poses risks not only at the financial level but may also affect the company's reputation and future financing capabilities.

Equity tokenization is not a shortcut, but a project that requires systematic understanding and professional execution. From compliance frameworks and public chain infrastructure to exchange licenses, custody, and clearing, every aspect cannot be overlooked. If companies act rashly, the risks may be amplified, and investor skepticism may also be transferred to the company itself.

Therefore, when enterprises attempt equity RWA, it is recommended to first engage in systematic learning and seek support from professional RWA accelerators to ensure that each link is implemented. Only in this way can equity tokenization truly become a tool for growth rather than a potential burden.