Fundrise Takes the Onchain Plunge: xStocks Tokenizes VCX While Short Sellers Sound the Alarm

Tokenized equities framework xStocks has partnered with alternative investment platform Fundrise to bring the Fundrise Innovation Fund onchain, expanding late-stage private market company exposure. The single tokenized asset VCXx is expected to go live on the xStocks platform in the coming days, according to a Friday announcement. Because nothing says "democratizing finance" quite like wrapping a closed-end fund in ERC-20 clothing and calling it innovation.

The move to bring Fundraise onchain comes just days after the closed-end fund began trading on the New York Stock Exchange with its portfolio that includes private shares of tech companies including Anthropic, Databricks and SpaceX. Early days trading saw the stock surge from its March 19 $31 debut price to as high as $575 per share. That's a 1,756% pump in what felt like a blink—clearly the market has strong opinions about exposure to AI companies, even if those opinions are mostly vibes.

However, a critical report by short seller Citron Research on Thursday alleged Fundrise Advisors LLC faced SEC charges in 2023 over paid solicitation activities. Citron called on regulators to examine whether the firm is currently compensating influencers to promote VCX. The shares ended the week at $173, down almost 34% on Friday, before shedding another 5.9% in after-hours activity. Nothing like a Citron report to remind everyone that in crypto and legacy finance alike, short sellers are the chaos gremlins who keep founders up at night.

Fundrise Innovation Fund co-founder and CEO Ben Miller told CNBC on Friday that critics were mounting an unfounded smear campaign and defended the fund's strategy and its effort to expand access to private tech companies. Miller's defense likely included the phrase "it's not a security, it's a feature"—but we're just guessing here.

In related news, tokenized RWAs climbed 13.5% despite a $1 trillion crypto market drawdown. Tokenized stocks also pushed past $1 billion in total value onchain earlier this month as investor interest grows in the fast-growing real-world asset sector. Data from RWA.xyz shows the value of tokenized equities climbing past the $1 billion mark, as platforms offering blockchain-based exposure to traditional stocks attract more investor trading and liquidity. Meanwhile, Bitcoin was busy having a seizure, but tokenized equities just kept on keeping on like that one degen who refuses to stop trading even during a nuclear winter.

Much of that activity remains concentrated among a small number of operators. RWA.xyz data shows Ondo holds about 58% of the market, while tokenized stock products issued under the xStocks platform account for roughly 24%, forming an early duopoly in the sector. Foresight Ventures in a March 10 report posited the market is consolidating around these early leaders, citing regulatory barriers, liquidity advantages and differing tokenization models as key factors shaping competition in the sector. So it's basically Ondo and xStocks running the show while everyone