SEC Draws Clear Rules for Tokenized Securities

The U.S. Securities and Exchange Commission released comprehensive guidance on January 28, 2026, removing lingering ambiguity around the legal status of tokenized securities.

The message from regulators was direct: placing a security on a blockchain does not change its legal obligations under U.S. federal securities law.

The statement, issued jointly by the SEC’s Divisions of Corporation Finance, Investment Management, and Trading and Markets, reinforces that registration, disclosure, and investor protection requirements apply equally to traditional and on-chain securities.

In practical terms, tokenization is treated as a change in recordkeeping technology, not a regulatory workaround.

Technology Neutrality and Security Classification

At the core of the guidance is the principle of technology neutrality. The SEC made clear that a security remains a security regardless of whether ownership is tracked on a blockchain or through a conventional centralized database. The legal analysis hinges on the rights attached to the instrument, not the infrastructure used to represent it.

The Commission also addressed dual-format issuance, confirming that issuers may offer the same security in both traditional and tokenized form at the same time. Where economic rights, voting power, and claims are identical, both formats are considered a single class of securities and must comply with the same regulatory standards.

Issuer-Sponsored Tokens Versus Third-Party Products

A critical distinction in the guidance separates issuer-sponsored tokenization from third-party token creation. When an issuer directly authorizes tokenized units and links the blockchain ledger to its official shareholder register, the SEC recognizes this structure as representing genuine on-chain equity ownership, including enforceable voting rights.

By contrast, tokens created without issuer involvement fall into custodial or synthetic categories. Custodial tokens represent claims on shares held by an intermediary, while synthetic tokens track price exposure through derivatives such as swaps. Regulators emphasized that these structures introduce additional counterparty and operational risks, placing them under heightened scrutiny.

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Market and Institutional Implications

The SEC signaled particular concern over the expansion of synthetic equity products to retail investors, suggesting future limits on their distribution in favor of issuer-approved models. This stance aligns regulatory incentives toward native, fully compliant tokenization rather than financial engineering designed to mimic equity exposure.

Institutional players have responded positively to the clarity. Exchanges such as New York Stock Exchange have pointed to the guidance as a key enabler for launching blockchain-based, 24/7 trading platforms for equities and ETFs later in 2026. Infrastructure providers, including Securitize, have also welcomed the framework, noting that it formally validates issuer-supported on-chain recordkeeping as a legitimate extension of U.S. market infrastructure.

A Compliance-First Path for Tokenization

Rather than slowing tokenization, the SEC’s guidance establishes a clear compliance pathway for its adoption at scale. By removing uncertainty around legal treatment, the framework encourages traditional issuers and regulated institutions to experiment with blockchain-based settlement and ownership models, provided they operate within existing investor protection rules.

For the market, the takeaway is structural rather than directional. Tokenization is no longer a regulatory gray zone, but its future in the U.S. will be built on issuer authorization, transparency, and full alignment with securities law, not on technological novelty alone.

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