On January 28, 2026, the staffs of the Securities and Exchange Commission’s (SEC) Division of Corporation Finance, Division of Investment Management and Division of Trading and Markets (collectively, the Staff) issued a joint statement addressing the regulatory treatment of “tokenized securities.” The Joint Statement provides the most comprehensive regulatory guidance to date on how SEC Staff understand the treatment of tokenized securities under the federal securities laws and establishes clear taxonomies and further confirms that the federal securities laws apply to tokenized securities regardless of whether ownership is recorded “onchain” or “offchain.”
Summary of the Joint Statement
The Joint Statement defines a “tokenized security” as “a financial instrument enumerated in the definition of ‘security’ under the federal securities laws that is formatted as or represented by a crypto asset, where the record of ownership is maintained in whole or in part on or through one or more crypto networks.” In addition, the Joint Statement distinguishes between (1) issuer-sponsored tokenized securities and (2) third-party tokenized securities.
Issuer-sponsored tokenized securities
With respect to issuer-sponsored tokenized securities, the statement explains that issuers can either:
Importantly, the Joint Statement expressly states that the “format in which a security is issued or the methods by which holders are recorded (for example, onchain vs. offchain) does not affect application of the federal securities laws.” Thus, an issuer could issue a single class of securities in both a “traditional” (that is, non-tokenized) format and a tokenized format. If the tokenized security is “of substantially similar character as the security issued in traditional format and holders of the tokenized security enjoy substantially similar rights and privileges, the tokenized security may be considered of the same class as the security in traditional format for purposes under the federal securities laws.”
Third-party tokenized securities
The Staff stated that they have witnessed two models of third-party tokenized securities:
The SEC emphasized that holders of synthetic tokenized securities face additional risks from the third-party issuer, such as bankruptcy exposure, that holders of the underlying security would not encounter. Furthermore, the Staff noted that while security-based swaps and linked securities are “economically similar,” each financial product is treated distinctly under federal securities laws. Thus, the regulatory requirements applicable to transactions in a tokenized security will depend on the classification of the security as a debt security (for example, a structured note), an equity security or a security-based swap. For example, subject to certain exceptions, a third party may not offer or sell a crypto asset representing a security-based swap to a person who is not an eligible contract participant.
Prior SEC statements and guidance
The SEC’s Joint Statement aligns with SEC Commissioner Hester Peirce’s July 2025 remarks emphasizing that “blockchain technology has unlocked novel models for distributing and trading securities in a ‘tokenized’ format” and that tokenization “may facilitate capital formation and enhance investors’ ability to use their assets as collateral.” Commissioner Peirce also cautioned that “as powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset. Tokenized securities are still securities.” Accordingly, she noted that “market participants must consider — and adhere to — the federal securities laws when transacting in these instruments.” Commissioner Peirce’s July 2025 statement also warned that a token that does not provide the holder with legal and beneficial ownership of the underlying security could be a “security-based swap” that cannot be traded off exchange by persons who are not eligible contract participants.
Interestingly, the Joint Statement is distinct from but complements prior SEC statements on the application of the US Supreme Court’s Howey “investment contract” test to digital assets. The investment contract test addresses whether a digital asset falls within the definition of an “investment contract” and is therefore a “security” subject to the federal securities laws. By contrast, the Joint Statement addresses assets that fall within the definition of a “security,” and provides a framework for categorizing the tokenized form of those securities for purposes of determining the rights of the holder of the asset (for example, ownership interest vs. synthetic exposure), and regulatory requirements applicable to firms transacting in those securities (for example, whether dealers in the tokenized securities are subject to regulation as securities dealers, or as security-based swap dealers).
SEC vs. CFTC: Distinct approaches to tokenization
On December 8, 2025, the Commodity Futures Trading Commission (CFTC) issued guidance on the use of tokenized assets as collateral in futures and swaps trading. While the SEC’s Joint Statement provides a framework for categorizing tokenized securities, the CFTC’s guidance addresses how existing CFTC requirements apply to tokenized assets in regulated derivatives markets.
As we have discussed in a separate client alert reviewing and analyzing the CFTC’s guidance on tokenized and digital asset collateral, the CFTC defines a tokenized asset as “a digital representation of a real-world asset, such as a US treasury or agency security, corporate bond, share in a money market fund or equity security, that has been recorded on a blockchain as a digital token.” The CFTC encourages market participants to limit tokenized collateral to assets already eligible to serve as regulatory margin — that is, assets that are liquid, have established haircuts and hold their value in times of financial stress. Critically, the CFTC guidance acknowledges that CFTC regulations do not require any particular technology or operational infrastructure to transfer or hold eligible collateral, stating that “assets retain their margin eligibility so long as they satisfy applicable regulatory requirements.” The SEC’s Joint Statement similarly takes a technology-neutral approach to tokenization of securities.
Firms active in both securities and derivatives markets should consider both the SEC guidance in the Joint Statement and the CFTC guidance on tokenized collateral. A firm transacting in tokenized securities will need to consider (i) how the token is categorized under the framework set out in the Joint Statement (for example., whether the firm holds a tokenized security entitlement, a linked debt or equity security or a security-based swap), and the regulatory requirements applicable to transactions in such securities and (ii) application of the CFTC framework when pledging those tokens as collateral for a derivatives position, including the CFTC guidance on eligible assets, legal enforceability, segregation and custody arrangements, haircuts and valuation and operational risks. Notably, both agencies emphasize existing regulatory frameworks rather than new rulemaking, suggesting a harmonized view that tokenization changes the form of assets but not their underlying legal character.
Practical considerations
The SEC and CFTC have now articulated complementary, technology‑neutral approaches to tokenization. Both agencies emphasize that existing regulatory frameworks continue to apply, even as market participants adopt new operational models.
Firms exploring tokenization should:
* Evaluate how tokenized instruments are categorized under the Joint Statement, and fit within existing securities and derivatives compliance programs
* Assess counterparty, custody and bankruptcy risks associated with third‑party tokenization models
* Review operational controls for onchain and offchain recordkeeping
* Engage with regulators where novel structures may require interpretive relief or updated rules
We are available to assist in evaluating tokenization strategies, structuring compliant offerings and engaging with SEC or CFTC staff as needed.
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