PANews reported on April 9 that according to CoinDesk, credit rating agency Moody's pointed out in a report on Wednesday that although the tokenization of funds is booming, the serious risks that come with it cannot be ignored by investors. Cristiano Ventricelli, vice president and senior analyst at Moody's Ratings, said that when evaluating tokenized funds, investors need to weigh the benefits against the risks brought by underlying technology, security, scalability and regulatory changes.

Moody's mentioned that many fund managers lack experience in the early stages of the tokenization market, have small teams and short track records, and face key person risks, that is, over-reliance on a few individuals. The departure of key executives or weak governance structures will shake the stability of the fund, so it urges fund teams to disperse responsibilities and strengthen risk management. Blockchain interruption is another risk, which stems from the novelty of the technology. Although smart contracts can improve operational efficiency, they are vulnerable to coding defects or malicious attacks. Although the use of public, permissionless blockchains improves accessibility, it increases the risk of potential attacks. Moody's recommends retaining off-chain backups and strictly auditing smart contracts. The redemption mechanism is also a weak link. Moody's encourages tokenized funds to allow redemption in both stablecoins and fiat currencies to buffer the impact of events such as stablecoin depegging or blockchain interruptions. In addition, tokenized funds operate in different jurisdictions with different regulatory provisions, and patchwork regulation increases the risk of legal barriers to investor claims. Although some funds adopt a structure that allows token holders to have direct claims on underlying assets, enforceability depends on local laws and the completeness of fund documents.