U.S. SEC Announces Classification on Tokenized Securities

The U.S. Securities and Exchange Commission (SEC) released a statement on January 28 regarding tokenized securities. The Corporate Finance Division, the Investment Management Division, and the Trading and Markets Division jointly provided their perspectives on the application of federal securities laws to tokenized securities.

Tokenized securities are financial instruments defined under federal securities laws, represented as digital assets, with ownership records managed on a blockchain network. There are two categories: those tokenized directly by the issuer and those tokenized by a third party.

In issuer-led tokenization, the issuer integrates Distributed Ledger Technology (DLT) into the securities holder record system. Asset movements on the blockchain network...