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Fraud in tokenization : A real world problem
Frolov, Nikita Mikhailovich (2025) Fraud in tokenization : A real world problem.
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| Abstract: | Commodity market tokenization, which entails issuing digital tokens backed by physical commodities, increases trading efficiency but also raises the possibility of fraud. An extensive review of academic literature and industrial sources has been done. This study investigates how well tokenized commodity markets handle fraud-related risks. It specifically looks at what kinds of fraud are most common in traditional commodity markets, what legal and technical safeguards tokenized platforms put in place, and how successful these measures are at preventing fraud. The results demonstrate that, similar to traditional markets, insider trading, market manipulation, and collateral misrepresentation continue to be fraud concerns in tokenized environments. Oracles and smart contracts are examples of blockchain technologies that improve transparency and automate processes, but they are insufficient to completely remove all risks, especially those related to the connection between digital tokens and tangible assets. Responses from regulators are emerging, such as the European Union’s Markets in Crypto-Assets regulation and various national securities laws, are emerging but remain fragmented, offering some oversight yet lacking global harmonization. The study comes to the conclusion that tokenization does not automatically fix fraud vulnerabilities, even though it offers new security features and increased transparency. To successfully prevent fraud and maintain market integrity in tokenized commodity markets, a combination of strong technical protections and more unified regulatory frameworks is needed. |
| Item Type: | Essay (Bachelor) |
| Faculty: | EEMCS: Electrical Engineering, Mathematics and Computer Science |
| Subject: | 54 computer science, 83 economics, 85 business administration, organizational science, 86 law |
| Programme: | Computer Science BSc (56964) |
| Link to this item: | https://purl.utwente.nl/essays/107520 |
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