Crypto Promised to Kill Brokers: One Alpaca Now Controls 94% of Tokenized Stocks
A single brokerage called Alpaca quietly became the custodian for 94% of the entire tokenized equities market, holding over $1.5 billion in shares that back crypto-native stock tokens — and most of the industry never noticed.
This is the irony nobody wants to say out loud: crypto built tokenized stocks specifically to cut out financial middlemen, and the result is a market more concentrated around a single intermediary than almost anything in traditional finance.
How We Got Here
Tokenized equities are crypto tokens pegged 1:1 to real-world stocks. The pitch was elegant: trade Apple or Tesla around the clock, on-chain, without a Robinhood or a Fidelity in the middle taking a cut. Pure DeFi. No gatekeepers.
Except someone still has to hold the actual shares.
That someone is Alpaca. The brokerage custodies the real equity positions that give tokenized stock products their value. According to public tracker data, its $1.5B in custodied shares represents the overwhelming majority of the tokenized equity market. One company. One point of failure. Ninety-four percent concentration.
Why the SEC Is Already Circling
The SEC has issued warnings that third-party stock tokens expose investors to layered risks that don't exist in direct equity ownership. Specifically: additional counterparty exposure and questions around who actually owns the underlying share when things go wrong.
Those aren't abstract concerns anymore. If Alpaca faces a regulatory action, a liquidity crisis, or simply decides to exit the business, the knock-on effect across 94% of tokenized equities could be immediate and severe. Token holders may discover their on-chain position has very traditional off-chain vulnerabilities.
The DTCC Is Coming, and That Changes Everything
Here is the other shoe dropping: the DTCC, which is the backbone of conventional U.S. securities settlement, is preparing to launch its own tokenization service in October. That is not a startup experiment. That is the institution that already processes tens of trillions in trades annually entering the tokenized equity race with full regulatory standing.
When the DTCC arrives, the question for every protocol currently routing through Alpaca becomes pointed: why take on the concentration risk of a single private custodian when the industry's central clearinghouse offers a regulated alternative?
What Traders Should Watch
If you hold tokenized equities on any DeFi platform, find out right now whether Alpaca is your custodian. The odds say it probably is. Then watch two things closely: the DTCC's October launch timeline and any SEC enforcement signals targeting third-party stock token structures. A regulatory move before DTCC goes live could leave 94% of this market in a very uncomfortable position with no immediate exit.
The brokers were never eliminated. They just got rebranded.