SEC Clarifies Compliance Rules for Tokenized Securities
The SEC has issued new guidance on tokenized securities, emphasizing that blockchain-based representations don't alter their regulatory status. The Divisions of Corporation Finance, Investment Management, and Trading and Markets jointly clarified that securities recorded on crypto networks remain subject to existing federal laws—even when ownership is tracked via distributed ledgers.
Tokenization merely changes the form, not the substance. Transferring security tokens on-chain constitutes a legal transfer of ownership, but issuers must still comply with Securities Act registration requirements unless exempt. The guidance underscores the SEC's stance: innovation in record-keeping technology doesn't rewrite securities regulations.