Burry Warns SEC Tokenized Stocks Could Create ‘Snow Crash’

Michael Burry warned on May 19 that plans by the U.S. Securities and Exchange Commission to allow crypto platforms to trade tokenized versions of U.S. stocks could push the market toward a “Snow Crash” cyber‑punk future. The SEC announced a delay of the proposal on May 22, 2026.

Burry posted his warning on his Substack newsletter and shared it on social media. He invoked Neal Stephenson’s 1992 novel Snow Crash to describe a fragmented society and wrote, “We may be headed full-on to a Snow Crash cyber-punk future with no long-term personal relationships and digital value embedded in all of us directly correlated to the value provided to a society that increasingly devalues humanity.” In the post’s comments he added, “Regulators have one job. Do not open scary doors.”

The policy under consideration would create an innovation exemption for crypto firms to issue and trade blockchain-based representations of public company shares. The proposal would allow tokenized shares to trade on blockchain platforms, potentially with lighter oversight than traditional exchanges and on a continuous, 24/7 basis.

Regulatory and market participants raised specific concerns about the plan. Critics pointed to risks from third‑party issuance of tokens, settlement failures, potential price manipulation and gaps in investor protections when trading occurs outside established exchange and clearance systems.

Some financial firms and market utilities have explored tokenizing real‑world assets such as stocks, bonds and real estate to enable faster settlement, fractional ownership and wider access for global investors. The Depository Trust & Clearing Corporation has examined variants of tokenization as part of those efforts.

Burry also discussed other themes in the post, including skepticism of artificial intelligence hype and concentration in venture capital. He cited a figure that 87 percent of recent venture capital flows went into AI during one reporting period.

The SEC provided no official explanation for the May 22 delay. The pause leaves open how tokenized securities would be incorporated into existing rules for disclosure, custody and settlement, and whether final regulations would apply the same investor protections that govern traditional equities.