SEC: Tokenization Does Not Evade Securities Laws

In a staff statement, the SEC’s Division of Corporation Finance emphasized that tokenization changes the format, not the legal identity, of a stock or bond — tokenized versions of traditional financial instruments remain subject to federal securities laws regardless of the technology used ^[1][2].

The agency said blockchain-based recordkeeping does not alter investor protections and warned that many stock tokens sold to retail investors provide only indirect or synthetic exposure rather than true ownership; the SEC said true tokenized ownership requires issuer approval ^[2][3].

The staff clarified different tokenization models—distinguishing issuer‑sponsored arrangements from third‑party tokenizers—and framed its guidance as a roadmap for compliant blockchain innovation while leaving open how crypto‑native products will fit into existing securities law ^[4][2].

The SEC’s guidance makes clear market participants should treat tokenized traditional securities as securities under U.S. law and structure offerings to satisfy issuer, registration, or exemption requirements ^[1][3].