The United States Securities and Exchange Commission has issued new guidance on tokenized securities, aiming to provide greater clarity for companies exploring the space by dividing such assets into two distinct categories.
In a statement released Wednesday, the SEC defined tokenized securities as either issuer-sponsored or third-party–sponsored. According to the regulator, tokenized securities generally fall into one of two groups: securities tokenized by, or on behalf of, the original issuer, and securities tokenized by third parties that are unaffiliated with the issuer.
Issuer-sponsored tokenized securities allow companies to tokenize their own assets in two primary ways. Issuers can either integrate blockchain technology directly into their ownership records or issue crypto assets that trigger updates to off-chain ownership records maintained on a separate ledger.
The SEC emphasized that existing securities laws, including registration and legal compliance requirements, continue to apply regardless of whether a security is tokenized or issued in traditional form.
“The format in which a security is issued or the methods by which holders are recorded (onchain vs. offchain) does not affect application of the federal securities laws.”
The SEC said unaffiliated third parties may also tokenize securities using either custodial or synthetic structures.
Under a custodial model, third parties create tokenized security entitlements in which the crypto asset represents an indirect ownership interest in underlying securities that are held in custody.
By contrast, the synthetic model involves issuing new securities that provide economic exposure to underlying assets without conveying actual ownership. Rights to the asset — referred to as a “linked security” — may take the form of structured notes, exchangeable shares, or security-based swaps.
Overall, the SEC’s guidance underscores that blockchain functions primarily as a record-keeping technology, and that the use of distributed ledgers does not exempt securities from existing regulatory requirements.
The guidance was welcomed by industry participants. Tokenization platform Securitize said in a post on X on Wednesday that it appreciated the SEC’s recognition of issuer-supported tokenization and onchain recordkeeping as a modern evolution of securities infrastructure.
“Clear frameworks like this are key to responsibly scaling tokenization.”
The SEC warned that holders of third-party–sponsored tokenized securities “may be exposed to risks with respect to the third party, such as bankruptcy.”
In guidance issued in December, the regulator emphasized that tokenized securities can operate within U.S. market safeguards, favoring broker-led custody over crypto-native self-custody.
The SEC also signaled support for the Depository Trust & Clearing Corporation (DTCC) to move certain stocks, bonds, and U.S. Treasuries onto blockchain-based systems.
