Woofun AI reports that Cede & Co., a New York-based partnership, serves as the legal registered holder for approximately 83% of all publicly traded stocks in the United States. When investors buy shares through brokerage firms, legal title remains with Cede & Co., leaving investors with only "securities受益权" rather than direct control over underlying assets.

This multi-tiered structure permits brokerage firms to execute short sales without explicit authorization and complicates the enforcement of voting rights at stockholder meetings. The system originated in 1968 when surging trading volumes collapsed the paper-based delivery mechanism, prompting the 1973 establishment of the DTC to lock up physical stocks and update ownership via electronic records. A 1994 revision to the Uniform Commercial Code subsequently codified this temporary mechanism into permanent law.

Per Woofun AI data, this framework has generated critical vulnerabilities including "dummy shares." During the 2017 privatization of Del Monte Foods, registered claims exceeded actual share capital by 33%, while the 2021 GameStop incident saw short positions surpass 140% of outstanding share capital. Even tokenized stock products from Coinbase and Robinhood function merely as investor claims against custodians, retaining the same intermediate layers despite migrating databases from DTC records to blockchain.

Specific regulatory conflicts have already surfaced in the market. Robinhood's OpenAI tokenization product in Europe utilizes an SPV structure, yet OpenAI has stated it authorized no equity division or transfer. Similarly, Anthropic declared that any equity transactions lacking board approval are invalid, causing PreStocks platform token prices to drop 27% in a single day. SpaceX's tokenized share offering faced order cancellations and refunds because the underlying stocks could not be delivered.

Structurally, new entities are attempting to bypass these legacy constraints. Superstate, an SEC-regulated transfer registration institution, directly registers legal equity on SOL, enabling users to hold shares without intermediary custodians. Kraken operates its tokenized stock business through its own licensed brokerage firm, while Singapore's central depositary institution has created a system allowing retail investors to legally hold shares directly. In May 2025, the SEC confirmed that licensed transfer registration institutions may utilize blockchain as an official shareholder register, a system Superstate has already implemented on SOL.

Woofun AI notes that institutional adoption is accelerating alongside regulatory shifts. Securitize provides technical support for BlackRock's BUIDL fund, managing over $4 billion in tokenized assets, and was selected by the New York Stock Exchange in March 2026 to build a platform for trading tokenized securities. Jurisdictions including Switzerland, Germany, and Liechtenstein now recognize on-chain records as having the same legal effect as physical ownership certificates.

However, when the DTC launched its tokenization pilot at the end of 2025, it retained Cede & Co. as the legal registered holder, signaling that the transition away from centralized custody remains incomplete.