Tokenized securities are fully subject to federal laws governing traditional instruments, according to a clarification by the SEC on the regulation of this asset form.
“A tokenized security is a financial instrument listed in the definition of ‘security’ under federal laws, represented or issued as a crypto asset, where the record of ownership is maintained fully or partially on one or more blockchains,” the agency explained.
The issuance format (off-chain or on-chain) does not negate obligations for registration, disclosure, and other requirements, the document emphasizes.
The SEC identified two main categories:
- Issuer tokenized securities. Blockchain is directly integrated into the register of owners. Network transfers legally secure the transfer of rights—this is the only difference from traditional accounting.
- Third-party tokenized securities. The underlying asset is held by a custodian, and the token represents a claim. Such instruments are subject to existing securities laws.
Also mentioned are “related securities”—synthetic products like structured notes and equity securities.
This classification may also apply to security-based swaps, such as derivatives providing synthetic exposure to an underlying asset. Typically, they are regulated by stricter requirements for counterparty access to transactions.
Status of Native Assets
However, the SEC did not address the main question: whether crypto assets themselves or staking programs are considered securities.
A prominent example of this unresolved issue is the situation with Ethereum. In 2024, it was revealed that in March 2023, the Commission began investigating Ethereum 2.0, considering the coin as a security.
This move contradicted statements by the then-head of the regulator, Gary Gensler. He repeatedly avoided giving a direct answer on the classification of the second-largest cryptocurrency by market capitalization.
Subsequently, the SEC closed the case without charges or explanation.
Earlier, in August, Commission Chairman Paul Atkins suggested that some tokens could be recognized as securities.