The US Securities and Exchange Commission has issued new guidance explaining how federal securities laws apply to tokenized securities. Released on January 28 by the Divisions of Corporation Finance, Investment Management, and Trading and Markets, the statement outlines two core categories: issuer sponsored and third party sponsored models.
Issuer sponsored tokenized securities are digital representations of securities that meet the legal definition of a security, with ownership records maintained on one or more crypto networks. In this model, issuers or their agents integrate distributed ledger technology into their systems so that on-chain transfers align with the official securityholder records. The SEC noted that issuers may offer securities in multiple formats, and tokenized versions can belong to the same class as traditional securities if their rights and privileges are substantially similar. Some crypto assets may also facilitate ownership transfers that are recorded off-chain.
Third party sponsored tokenized securities involve entities unaffiliated with the issuer. These fall into custodial or synthetic models. Custodial tokens represent ownership interests in another company’s securities, with records kept either on-chain or off-chain. Synthetic tokenized securities provide price exposure without issuer rights and include linked securities and security-based swaps, which are typically limited to eligible participants unless properly registered.
The SEC emphasized that tokenization does not change a security’s legal status and reaffirmed its willingness to engage with market participants seeking regulatory clarity.
