RWA Tokenization Needs Transparency to Build Trust

Aishwary Gupta, global head of payments and RWAs at Polygon Labs, delivers a stark warning about the current state of real-world asset tokenization: “Inflated dashboards don’t build institutional trust.” His assessment reveals an industry plagued by exaggerated claims where weekly announcements tout billions in tokenized assets, yet when institutional investors request basic verification details, the responses become mysteriously vague. This transparency deficit creates what Gupta describes as “smoke and mirrors” that threaten to erode the very institutional confidence the sector has worked years to establish.

The core issue lies in the gap between marketed numbers and verifiable reality. Gupta emphasizes that only demonstrable assets, clear regulatory frameworks, and genuine usage can power what many have called the RWA revolution. Without these foundational elements, the entire tokenization movement risks becoming another casualty of overpromising and underdelivering in the crypto space. The pattern of unsubstantiated claims has become so pervasive that it now represents a systemic risk to the sector’s credibility and long-term viability.

Recent regulatory enforcement actions demonstrate the seriousness of the transparency crisis. In May 2025, the United States Securities and Exchange Commission charged Unicoin for misleading investors by significantly overstating the value of its tokenized real estate deals. This regulatory intervention represents a clear warning shot across the bow of an industry that has operated with insufficient accountability. The SEC’s action against Unicoin underscores the growing regulatory scrutiny facing RWA tokenization projects that cannot substantiate their valuation claims.

Meanwhile, the Robinhood-OpenAI incident further illustrates the credibility challenges facing the sector. Robinhood’s claim that it was offering access to tokenized OpenAI stock forced the artificial intelligence company to publicly distance itself, clarifying that the offering did not represent real equity in the company. This public contradiction between a major technology company and a prominent trading platform highlights the definitional ambiguity and representation problems that continue to plague RWA tokenization efforts. Such incidents create confusion among investors and reinforce skepticism about whether tokenized assets truly represent ownership in underlying real-world assets.

According to Gupta’s analysis, the solution lies in a fundamental shift toward verifiability and regulatory compliance. He identifies three critical pillars for sustainable growth: verifiable assets that can withstand institutional due diligence, regulatory clarity that provides clear guidelines for compliant operation, and real usage that demonstrates practical utility beyond speculative trading. Without these elements, Gupta warns that the industry risks repeating the mistakes of previous crypto cycles where hype outpaced substance.

The institutional adoption that many RWA proponents envision requires building trust through transparency and accountability. This means developing standardized verification processes, embracing regulatory oversight rather than avoiding it, and focusing on creating tokenized assets that solve genuine problems in traditional finance. The alternative—continuing with inflated claims and unsubstantiated numbers—threatens not only individual projects but the entire premise of bringing real-world assets onto blockchain infrastructure. As regulatory bodies like the SEC increase their scrutiny, the window for self-correction may be closing rapidly for an industry that cannot separate reality from rhetoric.