Recently, the trend of real-world assets (RWA) (tokenization of real-world assets) has swept through mainland China’s social media with unusual intensity. From the blockchain community to the financial sector, and from self-media channels to investment groups, RWA has seemingly become synonymous with financial freedom overnight. Various “RWA project sponsors,” “full-service providers,” and “mentors” have sprung up like mushrooms after rain, each solemnly asserting that RWA is the next big opportunity and that missing out would lead to lifelong regret. However, the more vibrant this circle appears, the more chaotic and murky it becomes, with scammers preying on retail investors, speculators trading worthless assets, and anxiety peddlers all mingling together. I feel compelled to pour cold water on this hype—the current state of this circle is nothing but a boiling pot of filth, with a few leaves of leeks (retail investors) floating on the surface while scammers’ sickles bubble vigorously underneath.
Today, we will not delve into technical details. Instead, we will strip away this “Emperor’s New Clothes” and discuss the ten most painful truths about the RWA space. Fasten your seatbelts; we are getting straight to the point.
Truth 1: RWA Is a Financing Tool, Not a Myth of Wealth Creation
Many people hear “RWA” and immediately imagine getting rich overnight, believing that simply tossing any asset onto the blockchain will transform it into a glittering “wealth code.” Wake up! The core of RWA is tokenizing real-world assets through blockchain technology to create tradable digital assets. Put simply,it is a financing tool that helps enterprises revitalize their assets or provides investors with more options. It is neither a lottery ticket nor a money-printing machine.
Do you think buying RWA tokens equates to purchasing the “next 100x coin”? Stop dreaming. The return model for RWA is no different from traditional financial products; it relies on the cash flow or appreciation potential of the underlying assets. Those who frequently shout “Invest in RWA for financial freedom” are most likely trying to prey on you. While RWA can help enterprises address financing issues, it has nothing to do with the ordinary person’s fantasy of sudden wealth.
Truth 2: Mainland China Users Basically Cannot Access Legitimate Compliant RWA Products
If you believe RWA is a “feast open to everyone,” let me pour the first bucket of cold water on you: users in mainland China basically have no chance of accessing truly compliant RWA products, such as those issued in Hong Kong or Singapore. Why? Because compliant RWA products must adhere to strict financial regulations. Issuers must ensure that investors’ identities and sources of funds are legitimate and comply with local securities laws, anti-money laundering laws, and other regulations.
Hong Kong’s RWA products are targeted at professional investors, requiring proof of assets worth millions of Hong Kong dollars and passing strict KYC (Know Your Customer) and AML (Anti-Money Laundering) checks. As an ordinary retail investor from mainland China, you cannot even open an account, let alone make purchases. Those promoting “RWA accessible to everyone” in WeChat groups or on Douyin are not offering compliant products; they are mostly promoting worthless tokens or Ponzi schemes, specifically targeting your wallet.
Truth 3: Anyone Telling You “Investing in RWA Tokens Makes Money” Is Preparing to Scam You
The most disgusting aspect of the mainland RWA circle isthe proliferation of “worthless tokens” and “Ponzi schemes.”The most absurd phenomenon today is that people who cannot even distinguish between ABS (Asset-Backed Securities) and REITs (Real Estate Investment Trusts) are teaching others how to engage in RWA. Their rhetoric is surprisingly uniform: “Liquidity explodes when traditional assets are put on-chain,” “RWA tokens can be traded globally 24/7,” “Holding means enjoying asset appreciation...” Does this sound familiar? It is identical to the slogans of “blockchain disrupting everything” during the ICO (Initial Coin Offering) era. These projects, under the guise of RWA, tell you to invest a few thousand yuan to buy their “RWA tokens” and wait for hundredfold returns. Friends, ladies, where does such a good deal exist? These so-called RWA tokens have no underlying asset support; their whitepapers are often plagiarized, representing nothing more than obtaining something for nothing.
Even more outrageous, some projects implement multi-level distribution and referral commissions, indistinguishable from pyramid schemes. You invest money, and in the short term, the “returns” may appear high, but this is merely earlier retail investors feeding later ones. Once the Ponzi scheme collapses, your principal will vanish without a trace. Do not believe the nonsense that “RWA is the future of blockchain” or “Missing RWA means missing out on wealth.” Genuine RWA is a serious financial product, not a casino for you to gamble your family fortune.
Truth 4: Enterprises Pursuing RWA Should Engage Securities Firms, Lawyers, and Accountants, Not “Middlemen”
Enterprises intending to pursue RWA must also keep their eyes open.There is a bizarre phenomenon in the current RWA circle: a group of intermediaries calling themselves “RWA full-service providers” are more active than securities firms, accountants, and lawyers combined. Numerous “RWA full-service providers” and “mentors” have emerged in mainland China, boasting extravagantly that they can help you put assets on-chain, issue tokens, and sell them globally. Hah, these people are mostly intermediaries whose work amounts to little more than matchmaking, earning a consulting fee from you.
Properly executing RWA is similar to handling ABS (Asset-Backed Securities) or REITs (Real Estate Investment Trusts); you need a “iron triangle” of professional securities firms, lawyers, and accountants. They will help you design the transaction structure, navigate regulatory approvals, and conduct due diligence and valuation. What can middlemen do? They barely understand compliance processes; at best, they paint you a rosy picture and charge a “service fee.” Enterprises pursuing RWA should not be misled by these “mentors”; engaging reliable financial institutions is the correct path.
Truth 5: Not Everything Can Be RWA; Assets That Cannot Sell Off-Chain Will Not Sell On-Chain Either
A classic rhetoric in the RWA circle is: “Poor liquidity for traditional assets? Put them on-chain! Then they can be traded globally!” It seems as if tossing any asset onto the blockchain will instantly make it desirable. Friends, be realistic! Why would assets that cannot sell off-chain suddenly sell on-chain? The essence of RWA is asset securitization, with the core being the quality of the underlying assets and the return model. If your asset is inherently a mess, such as unwanted inventory or an office building that cannot be rented out, it will remain unsold even if put on-chain. Poor asset liquidity is fundamentally due to poor asset quality, having nothing to do with whether it is on-chain or not.
Investors in Hong Kong are not fools; they are smart money. They evaluate RWA based on cash flow, risk exposure, and exit mechanisms. They can instantly recognize your “20% annualized return” model as nonsense. RWA is not magic; the logic of assets remains unchanged whether on-chain or off-chain. Those promoting “everything can be RWA” merely want you to pay for trial and error so they can profit from it.
Truth 6: Establishing an Entity in Hainan Is Not Mandatory; Data Compliance Is Not So Mysterious
Another “mystical” operation in the mainland RWA circle is that many project sponsors claim one must establish an entity in Hainan to achieve compliance for cross-border data transfer. Please, it is not that exaggerated. While cross-border data transfer must be compliant, national-level regulations such as the “Measures for the Security Assessment of Cross-Border Data Transfer” have already established clear procedures. Not all cross-border data transfers require approval; only the cross-border transmission of sensitive data requires filing or security assessment. Compliance requirements for cross-border data transfer depend on various factors, including specific data types and transfer scenarios, meaning not every situation requires going to Hainan.
Furthermore, Hainan’s special policies mainly target offshore business within the Free Trade Port and are not the only path for RWA. For enterprises pursuing RWA, the core is to navigate the compliance process, such as engaging lawyers to outline data compliance solutions and communicating with regulators for filings. Do not listen to the hype that “you must go to Hainan” or “Hainan is the RWA paradise.” The path to compliance has always been transparent; there is no need for such convoluted detours.
Truth 7: Hong Kong’s RWA Products Basically Lack a Secondary Market; Global Trading? Think Again!
Another common “myth” in the RWA circle is that RWA tokens can be traded globally with unbeatable liquidity. What is the reality? The Hong Kong SFC (Securities and Futures Commission) is extremely cautious regarding secondary trading. Currently, RWA products issued in Hong Kong have only opened up extremely limited inter-institutional trading. Ant Chain’s charging pile RWA and Xunying Group’s battery swap cabinet RWA are essentially private placement products; retail investors cannot even access the trading interface. Why? Because RWA is fundamentally a securitized asset subject to strict financial regulation, and trading must comply with securities laws and exchange rules.
Do you think buying an RWA token allows you to trade globally 24/7 like Bitcoin? Think again! Hong Kong’s RWA products are typically traded among institutional investors or professional investors; retail investors simply cannot participate. Projects boasting “global circulation of RWA” are mostly using “blockchain” as a gimmick, while in reality, they are just closed funding pools. Liquidity? It does not exist.
Truth 8: The RWA Sector Is Not a Wealth Code for Ordinary People; Do Not Be Misled by Anxiety Marketing
The most annoying aspect of the RWA circle is the pervasive anxiety marketing. Phrases like “RWA is the future of blockchain,” “Missing RWA means missing out on wealth,” and “Ordinary people can turn their lives around with RWA” are nauseating when heard repeatedly. Friends, RWA is a serious financial sector involving the combination of asset securitization and blockchain technology; what does it have to do with ordinary people’s opportunities to earn money?
Those who truly profit from the RWA sector are either professional financial institutions or players who understand asset operations. Ordinary retail investors? At most, they can purchase some compliant RWA products to earn fixed returns, no different from buying bonds. Those promoting “RWA can make you rich overnight” merely want you to pay for their “courses” or “tokens.”Do not be held hostage by anxiety; RWA is not your lifeline.
Truth 9: Compliance and Regulation Are the Soul of RWA; RWA Without Compliance Is an Empty Promise
The greatest value of RWA lies in compliance and regulation.Without these two elements, what is the difference between RWA and worthless tokens? Compliant RWA products must have clear underlying assets, transparent transaction structures, and be subject to review by financial regulatory authorities. The reason Hong Kong’s RWA is reliable is precisely due to the strict regulation by the SFC (Hong Kong Securities and Futures Commission), which protects investors’ rights and interests.
In contrast, how many of those “RWA projects” in mainland China are truly compliant? Most do not even have a whitepaper; the location of assets and the source of returns are based solely on verbal claims. If you invest money and the project sponsors run away, whom can you cry to? The soul of RWA is compliance and regulation; “RWA” without these is an empty promise with no guarantees.
Truth 10: RWA Issuance Costs Are Not Low and May Be Higher Than Traditional Financing
Finally, many people believe RWA is a “low-cost financing artifact,” but this is completely untrue. RWA issuance involves asset valuation, legal due diligence, transaction structure design, blockchain development, and regulatory approvals, each step requiring significant costs. Calculated overall, the issuance cost of RWA may be higher than traditional loans or equity financing.
Especially for small and medium-sized enterprises (SMEs), issuing RWA faces high upfront investments, such as legal fees, audit fees, and technology development costs. Hong Kong’s RWA projects often incur costs of several million Hong Kong dollars, which few mainland enterprises can afford. Therefore, do not believe the nonsense that “RWA is the savior of SMEs.”Financing methods must depend on the enterprise’s specific situation; RWA is not a panacea.
Conclusion: Stay Clear-Headed; RWA Is Not Your Lifeline
Writing this article is not to deny the value of RWA—asset tokenization is indeed a future trend. It makes asset securitization more efficient and transparent, representing a direction for the integration of blockchain and finance. However, the problem lies in the fact that the current circle is too impetuous, too eager for quick success, and treats retail investors like fools. Worthless tokens preying on retail investors, marketing accounts selling anxiety, and intermediaries charging exorbitant prices have turned a serious financial sector into a mess.
If ordinary people wish to participate in RWA, they should at most purchase some compliant RWA products to earn stable returns, without expecting overnight wealth. If enterprises wish to pursue RWA, they should engage professional institutions and navigate compliance processes, avoiding being swindled by “full-service providers.”RWA is neither a myth nor a casino. Recognize these ten truths and do not let your wallet become someone else’s field for harvesting retail investors.
If, after reading this article, you still intend to jump into the fire pit of RWA—then please provide me with your wallet private key before you jump, and I will safeguard it for you.
*This article is an original work by Mankun Law Firm. It represents only the personal views of the author and does not constitute legal consultation or legal advice on specific matters. More Web3 practitioners are welcome to contribute articles or expose information. For reprinting permissions and legal consultation, please add customer service contact: mankunlawyer.
