Citi launched a blockchain-based platform for pre-IPO shares in June, addressing how wealthy clients can trade stakes in private companies without exposing cap tables to the wider market by building a closed system visible only to approved parties. Marc Boiron, CEO of Polygon Labs, argues this design trades liquidity for privacy, telling FinanceFeeds that locking shares inside one private system limits buyers to the handful already inside it. The critique targets the central tension in tokenized private markets, where a report highlighted this week shows the tokenized real-world asset market at roughly $60 billion, yet $32.9 billion spread across 910 assets recorded zero weekly transfer activity.
Boiron Separates Privacy from Network Isolation
Boiron's argument rests on separating privacy as a cryptographic problem from network design. He states zero-knowledge proofs can let a regulator or counterparty verify that a transfer is valid and a buyer qualifies without seeing deal terms, while eligibility is enforced at the asset level so it only settles into wallets meeting issuer conditions. Both work on open networks, he says, meaning a bank can maintain confidentiality without stranding the asset on its own ledger.
The distinction matters because the asset sits on a single institution's ledger in closed systems, and confidentiality becomes a byproduct of walls rather than a design feature. This leaves fully eligible buyers unable to reach the asset unless they are already clients of the bank holding it. Boiron clarifies the legally eligible universe for a private security does not change—buyers remain accredited or qualified investors or eligible non-US investors under relevant exemptions.
Just 62 assets account for 88% of the tokenized market's value, according to the report. David Taylor, co-founder and CEO of tokenization firm EtherFuse, called the sector a "waiting room" rather than a market in the report quoted by Forbes.
Securities Law Boundaries Apply On-Chain
Boiron concedes that securities law sets the boundary and applies on-chain. In a January statement, US regulators confirmed that a security remains a security once tokenized, with the same transfer restrictions and eligibility rules attached. "Anyone telling you the technology expands who can lawfully buy a private share is selling something," he said.
What changes is distribution, cost, and settlement downstream of eligibility. A siloed asset never gets quoted because market makers will not commit capital to something they cannot move off a single venue, he argues. He points to tokenized institutional funds such as BlackRock's BUIDL, which settle and move across public networks including Polygon, as evidence that a regulated product can operate on open rails without giving up compliance.
Citi Maintains Control Over KYC and Compliance
Boiron does not dispute that Citi's control over KYC, compliance, and issuer consent is what a regulated bank's clients and supervisors expect, calling it "responsible" rather than "behind." A closed system is the right call when a product is first to market and needs total regulatory certainty, he allows.
Citi has said it wants other institutions to plug into the platform, which would deepen the buyer pool over time. The open question is whether that materializes or whether each bank builds its own enclosure. For Boiron, whose Polygon network has a direct stake in banks choosing public rails, the risk is staying closed once the tooling to be open and compliant already exists.
FAQ
What did Citi launch in June?
Citi launched a blockchain-based platform for pre-IPO shares in June that lets wealthy clients trade stakes in private companies through a closed system visible only to approved parties.
Why does Marc Boiron critique Citi's platform design?
Marc Boiron argues the closed system trades liquidity for privacy by locking shares inside one private system, limiting buyers to the handful already inside it, while zero-knowledge proofs and programmable eligibility could provide confidentiality on open networks.
What did US regulators confirm about tokenized securities in January?
In a January statement, US regulators confirmed that a security remains a security once tokenized, with the same transfer restrictions and eligibility rules attached.
