SEC clarifies rules for tokenized securities, placing asset class under federal securities laws

The U.S. Securities and Exchange Commission (SEC), through its Divisions of Corporation Finance, Investment Management, and Trading and Markets, released guidance clarifying that tokenized securities fall under federal securities laws, regardless of their on-chain format. The agency defines a tokenized security as a financial instrument under existing law that is represented by a crypto asset, with ownership records maintained on a crypto network. This guidance aligns with previous statements by SEC officials, such as Commissioner Hester Peirce, who maintained that tokenized assets are still securities. The SEC categorized tokenized securities into two main types: "issuer-sponsored" where blockchain integrates directly into ownership records, and "third-party sponsored securities," which include tokens representing indirect interests via security entitlements or "synthetic" linked securities offering only economic exposure. In all cases, existing registration, disclosure, and other obligations under federal securities laws apply.

(Source：The Block)