70% of Tokenized Assets Fall Short on Transparency, Report Finds | Markets Outlook

Chronicle’s review of about 20 tokenized assets found that 70% fell short of its transparency standards. The assets in that group were worth about $12.2 billion to $12.3 billion. Syrup, USDC, Prime, and Falcon X were among those named as not meeting the report’s standard. The findings point to a gap between making an asset available as a token and providing the information needed to use it safely in on-chain markets.

Nicholas Kunkel said tokenized assets need verified information about their underlying holdings, composition, and value, as well as asset-specific updates such as dividends, stock splits, and other corporate actions. Chronicle evaluates transparency across five pillars: independence, granularity, frequency, verifiability, and on-chain availability. The criteria are intended to establish whether relevant asset information is sufficiently detailed, dependable, current, and accessible for on-chain use.

Kunkel said issuing a token is only the first step. DeFi protocols also need verified data infrastructure to integrate tokenized assets and manage the risks they introduce. Chronicle’s Proof of Asset connects to custodians, fund administrators, and transfer agents, reconciles information from them, and relays a cryptographically provable model on-chain. Kunkel said transparency can be improved by adding metadata for on-chain risk systems without reissuing the asset.

The discussion framed the data-infrastructure shortfall as a constraint on DeFi growth and scalability, not merely a question of whether markets are pricing in risk. Without data flowing into risk-management systems, protocols cannot properly assess exposure and face severely limited balance-sheet caps. Tokenization can make assets more mobile and usable for lending or borrowing, but those potential benefits depend on the assets being integrated into on-chain systems and supported by information those systems can evaluate.

The speakers said large financial institutions, including BlackRock, Bank of New York Mellon, and Galaxy, understand the utility of integrating tokenized assets into on-chain systems and are advancing tokenization. They also endorsed the SEC and CFTC view that an asset should be treated the same regardless of whether it is represented in crypto form. Institutional acceptance has grown as a policy framework has given institutions a basis on which to build products and plan, although the discussion said the framework’s scope still needs to expand.

Tokenized funds, the speakers argued, should have transparency comparable to the audit and reporting obligations of traditional funds. They said backing should be verifiable in real time, potentially second by second. Continuous market monitoring could give regulators more information than monthly audits, but the practical promise of tokenization depends on reliable, timely evidence of what assets are held and what they are worth. The episode’s central concern was therefore not just whether more assets are tokenized, but whether their backing and relevant events can be verified and used by on-chain risk systems.