SEC confirms securities law applies to tokenized stocks: Wall Street accelerates embracing the on-chain asset era

January 29 News, the U.S. Securities and Exchange Commission (SEC) released new guidance, clearly stating that regardless of whether securities are issued in the form of blockchain tokens, their legal attributes remain under the regulation of U.S. federal securities laws. In other words, traditional financial assets such as stocks and bonds, when “on-chain,” still need to comply with registration, disclosure, reporting obligations, and anti-fraud rules.

The SEC emphasized in the statement that the form of securities or the method of recording ownership does not change their legal nature. This means that tokenized securities are first and foremost securities, and only secondarily a technological product. This stance provides a clear compliance path for institutional issuance of on-chain assets and eliminates previous gray areas regarding “technological exemptions.”

Tokenization involves mapping ownership of real-world assets to digital tokens on the blockchain. Supporters believe this model can shorten settlement times, reduce costs, and increase transparency. As global financial institutions explore this direction, regulatory attitudes become a key variable for market expansion. BlackRock CEO Larry Fink previously stated at Davos that the move toward a tokenized financial system is an “inevitable” process.

The SEC also distinguished two types of tokenization structures: one driven directly by the original securities issuer, and another initiated by a third party. Even tokens that do not have direct rights related to the original stock must follow securities regulatory frameworks if their prices are linked to securities.

However, the guidance does not fully resolve compliance issues for secondary market trading. Some companies have launched tokenized stock services outside the United States. Robinhood CEO Vlad Tenev believes that if stocks had achieved on-chain settlement in the past, it could have prevented trading disruptions like the GameStop incident in 2021.

Domestically in the U.S., relevant legislation is still under debate. The Clarity Act is seen as potentially providing a clearer regulatory environment for tokenized assets, but progress has been inconsistent. CEX CEO Brian Armstrong publicly opposed some provisions of the bill, believing they could limit the development of tokenized equity.

Nevertheless, this SEC confirmation of regulatory applicability lays a foundation for the integration of traditional finance and blockchain technology. As the regulatory framework gradually becomes clearer, tokenized stocks are moving from concept to reality and are becoming an important part of the digital transformation of capital markets.