On 9 July 2025, US SEC Commissioner Hester M. Peirce published a statement titled “Enchanting, but Not Magical: A Statement on the Tokenisation of Securities”, where she discussed the increasing adoption of blockchain technology for the tokenisation of securities. Commissioner Peirce stated that, despite the innovative potential of tokenisation to facilitate capital formation and enhance asset utility, tokenised securities remain subject to existing US federal securities laws. She warned that blockchain technology does not change the legal nature of the underlying asset; therefore, all market participants, including both new entrants and established firms, must adhere to US SEC regulations when issuing, distributing, or trading tokenised securities.
Commissioner Peirce also pointed out the unique risks associated with third-party tokenisation, such as counterparty risks, and reminded distributors of their disclosure obligations under US SEC rules. She encouraged market participants to engage with the US SEC to ensure compliance and to discuss potential updates to regulatory frameworks where technological advancements may warrant change. The US SEC reaffirmed its readiness to collaborate with industry stakeholders to modernise rules and craft appropriate exemptions as needed.
Securities Classification of Tokenized securities, whether issued by the original issuer (e.g., tokenized company shares) or by third parties tied to custodied assets, remain securities under US federal law. Peirce noted that tokenization does not alter the legal nature of the underlying asset, and compliance with securities regulations is mandatory.
Disclosure Obligations on Distributors of tokenized securities must adhere to disclosure requirements outlined in the federal securities laws. The SEC’s Division of Corporation Finance issued a related staff statement on April 10, 2025, titled “Offerings and Registrations of Securities in the Crypto Asset Markets,”
Token Structures and Risks on Tokens which may be classified as “receipts for securities,” constituting distinct securities, or as “security-based swaps,” which cannot be traded off-exchange by retail investors. Third-party tokenization may introduce unique risks, such as counterparty exposure, requiring careful legal consideration.
(Source: https://www.sec.gov/newsroom/speeches-statements/peirce-statement-tokenized-securities-070925)
