SEC Clarifies Rules for Tokenized Securities on Blockchains

The U.S. Securities and Exchange Commission (SEC) has issued new guidance clarifying the treatment of tokenized securities on blockchains under existing laws. This announcement, made on January 28, 2026, emphasizes that any asset recorded on a blockchain that qualifies as a security must comply fully with U.S. securities laws, including registration and investor protection requirements.

The SEC’s guidance is significant, as it delineates what constitutes true ownership of tokenized securities and the responsibilities of issuers and investors. Importantly, the SEC clarified that using blockchain technology does not exempt these securities from regulatory requirements. Ownership rights, transfer approvals, and shareholder records must remain under the control of the issuing company.

Understanding Tokenized Securities

To streamline the complex landscape of tokenized assets, the SEC categorized these securities into two main groups. The first group consists of issuer-sponsored tokenized securities. This model is deemed the safest and most compliant, as it involves the company that issues or authorizes the tokens, linking blockchain records with the official shareholder register. Investors in this model enjoy authentic ownership rights, including voting rights and access to company information.

In contrast, the second category encompasses third-party-sponsored tokenized securities. These tokens are created without direct involvement from the underlying company, often providing only price exposure rather than genuine ownership. As a result, investors may lack voting rights, access to company information, or legal claims against the issuer.

The SEC highlighted the risks associated with third-party tokenized stocks. Many of these products rely on custodians holding the actual shares, which introduces potential bankruptcy or counterparty risks for investors. Additionally, some offerings are entirely synthetic, tracking price movements through financial contracts. This concern was underscored when OpenAI publicly rejected tokenized equity products linked to its shares that were marketed in Europe.

Industry Reactions and Implications

Crypto industry leaders have welcomed the SEC’s clarification as a critical step forward. Paul Grewal, Chief Legal Officer at Coinbase, remarked that the guidance illustrates how tokenized equities can be issued and traded on-chain with appropriate regulatory support. He emphasized that this regulatory clarity will enable the introduction of these products into the market, bolstering the U.S. position in financial innovation.

Similarly, Matt Hougan, Chief Investment Officer of Bitwise Investment, described the SEC’s guidance as a positive advancement toward integrating real-world assets onto blockchains in a compliant and transparent manner. The overarching message from the SEC is clear: while blockchain innovation is permissible, adherence to ownership rules and investor protections is paramount.

As the regulatory landscape evolves, stakeholders in the crypto and tokenization sectors look to leverage this guidance to foster innovation while ensuring compliance with established securities laws. The SEC’s proactive stance may pave the way for a more robust framework for tokenized securities, potentially enhancing investor confidence in this emerging asset class.