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SEC staff across the agency’s Divisions of Corporation Finance, Investment Management, and Trading and Markets on Jan. 28, 2026 issued a joint staff “Statement on Tokenized Securities” describing how existing U.S. federal securities laws apply to “tokenized securities,” which it defines as securities represented in crypto-asset form with ownership records maintained in whole or in part on crypto networks. The staff statement emphasizes it reflects staff views rather than Commission action, carries no legal force, and does not create new obligations, while aiming to clarify how registration, disclosure, and other securities-law frameworks apply when a security is issued or represented onchain.
The document lays out a taxonomy of tokenization models and associated legal touchpoints that market participants typically encounter. For issuer-sponsored tokenization, the staff describes structures where the issuer integrates distributed ledger technology into its systems such that onchain transfers correspond to updates in the issuer’s master securityholder file, as well as variants where the crypto network is not part of the master record and the token is used indirectly to facilitate transfers reflected offchain. For third-party tokenization, it discusses models including tokenized security entitlements and “linked” or synthetic instruments that reference a security but do not convey rights against the issuer, and notes that depending on facts and circumstances, third-party arrangements could raise Investment Company Act issues.
In outlining operational and legal context, the statement stresses that the “format” of a security—tokenized or traditional—does not change the application of federal securities laws, citing the statutory definitions of “security” and framing tokenized securities as remaining within established Securities Act and Exchange Act regimes. It also points to the relevance of state commercial law and the indirect holding system in U.S. markets, referencing Uniform Commercial Code Article 8 concepts such as effective transfer and control, and directing readers to the SEC’s earlier proxy-system concept release for background on indirect ownership arrangements.
The staff statement also situates tokenization within existing market infrastructure developments by referencing, in a footnote, a Division of Trading and Markets no-action letter addressed to The Depository Trust Company regarding a pilot described as DTCC Tokenization Services. In that letter, DTC sought assurance that staff would not recommend enforcement action in connection with launching a “Preliminary Base Version” enabling DTC participants to record security entitlements using distributed ledger technology rather than only DTC’s centralized ledger, while registered ownership would remain in the name of DTC’s nominee, Cede & Co. The staff statement’s reference to that letter underscores the intersection between tokenization initiatives and existing Exchange Act frameworks governing clearing agency operations and related rule and systems requirements.
For issuers and platforms involved in real-world asset structures—where tokenized real estate offerings are often presented as equity or debt interests rather than direct title—this statement is relevant as it frames common issuance and third-party “wrapping” models within standard securities-law compliance pathways rather than treating tokenization as a separate regime. The immediate practical impact is informational rather than rule-changing: the staff positions the document as a compliance and submission aid for market participants preparing registrations, exemptive requests, or other proposals, while reiterating that it does not alter underlying legal requirements.
This affects issuers considering tokenized formats, intermediaries and platforms designing issuance, custody, or synthetic exposure products, and regulated market utilities engaging with tokenization pilots, as all face the same baseline securities-law obligations regardless of onchain implementation. For investors, the statement highlights that third-party tokenization structures may introduce additional risk exposure to the third party (including bankruptcy-related risks) while not necessarily conveying the same rights as the referenced security, reinforcing the need to assess the legal nature of the tokenized instrument being offered.
