SEC Crypto Task Force Chief Doubles Down: Tokenized or Not, Your Assets Are Still Securities

The SEC's Crypto Task Force isn't backing down—tokenization doesn't magically erase securities laws, warns its head in a fresh salvo against regulatory arbitrage.

Same Rules, New Wrapper

Whether it's a stock, bond, or a blockchain-based token, the SEC's stance remains ironclad: if it walks and talks like a security, it gets treated like one. The Task Force's latest warning shoots down hopes that tokenization could be a loophole for dodging compliance.

Crypto's Compliance Paradox

Innovation keeps sprinting ahead, but regulators insist the playbook hasn't changed. The message? Fancy tech doesn't rewrite decades of securities law—no matter how much the crypto crowd wishes it would. (And let's be honest, Wall Street's been repackaging the same stuff for centuries—why should crypto get a pass?)

The Bottom Line

Until the SEC blinks, tokenized assets face the same old hurdles. So much for decentralization 'disrupting' the system—turns out, the system still holds all the cards.

Legal obligations

Peirce’s bulletin notes that tokenization can occur in two ways: an issuer can mint blockchain versions of its own shares, or a custodian can wrap third-party securities and issue receipts.

She warned that the second model introduces counterparty risk because the token holder depends on the custodian’s solvency and control of the underlying shares. 

Peirce urged distributors to consult the SEC’s Division of Corporation Finance’s “staff statement” on disclosure duties and to meet with agency staff early if they seek bespoke exemptions.

She also flagged that the rules might classify specific token formats as “receipts for a security” or, if they lack beneficial ownership rights, as “security-based swaps” barred from off-exchange retail trading.

Peirce wrote:

Growing on-chain stock activity

Peirce’s remarks arrive as tokenized equity volumes accelerate. Solana-based stock tokens issued under Backed Finance’s xStocks framework.

Dashboard snapshots from data provider RWA.xyz show that the total surpassed the $50 million mark on July 6.

Furthermore, xStocks is now moving to other venues. BNB Chainthat it will list Apple, Tesla, and other equity tokens as BEP-20 assets in partnership with Kraken and Backed, providing users with 24-hour access and DeFi composability.

Market participants largely welcomed the clarity. Backed Finance co-founder Adam Levi said in a statement that the company “designed xStocks to mirror traditional equity custody so regulatory treatment remains straightforward.” 

Kraken added that DeFi integrations on BNB Chain will let users post tokenized stocks as collateral without altering their securities status.

Separately, Bitget integrated xStocks into its on-chain platform on July 9, enabling customers to trade the same tokens from their spot accounts without the need for separate wallets.

Peirce closed by signaling openness to modernization, saying the Commission “stands ready to work with market participants to craft appropriate exemptions and modernize rules” where technology exposes gaps.