By: Gena Dirani
On January 28, 2026, staff from the SEC’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement addressing tokenized securities — traditional securities that use blockchain or distributed ledger technology for issuance, ownership recordkeeping, or transfer.
The statement did not introduce new rules or exemptions but rather clarifies that tokenized securities remain subject to the same registration, disclosure, and liability provisions of the federal securities laws as traditional securities. Issuers and market participants should therefore analyze tokenized securities by focusing on the underlying instrument and the rights it conveys, rather than the technology used to represent or transfer it.
The statement explains that tokenized securities can be structured in different ways. In some cases, an issuer or its transfer agent may incorporate distributed ledger technology into the issuer’s official record of ownership, so that transfers of the token directly correspond to changes on the issuer’s books. In these structures, token holders generally hold the same legal rights as holders of the security in traditional form, and the blockchain functions as part of the issuer’s recordkeeping system.
In other cases, a third party may issue tokens that reference or are linked to an underlying security without the issuer using distributed ledger technology as its official record of ownership. In these arrangements, token holders may not hold the security directly and instead may have contractual or economic rights against the intermediary that issued the token. The staff noted that these distinctions matter because the legal analysis depends on what rights the token holder actually receives, and which parties are involved in issuing, maintaining, and transferring the token.
This serves as a reminder that tokenized securities should be evaluated through the same regulatory lens as traditional securities and that functions such as trading and maintaining custody of tokenized securities are still subject to the regulatory requirements tied to those activities. Advisers should focus on understanding the structure of the tokenized instrument, the rights it conveys to clients, and the role of intermediaries, rather than assuming that the use of blockchain technology alters the applicable regulatory framework.