According to a Wednesday statement by SEC commissioner Hester ‘Crypto Mom’ Peirce, any firm eyeing tokenized securities must talk to regulators before moving forward. Peirce, who leads the agency’s crypto task force, warned that blockchain does not change what an asset really is. Tokenized shares still count as securities under US law.
Peirce Reminds Firms Of Federal Rules
Based on reports, Peirce’s warning came about two weeks after trading app Robinhood unveiled its own layer‑2 blockchain for tokenization. She urged firms to clear their plans with SEC staff before minting tokens tied to stocks or funds.
“As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset,” Peirce said. Tokenized securities are still securities, she added, and must follow registration and disclosure rules.
Market watchers see parallels with former SEC chair Gary Gensler, who often told token projects to “come in and talk” if they might be offering securities.
Peirce did not call out Robinhood by name, but the timing was clear: the company filed a proposal in May to set up a framework for tokenized real‑world assets under US rules.
Robinhood plans to let European users trade tokens tied to US stocks and ETFs, including big names like Apple and the S&P 500 fund.
House Republicans Push Clarity For Crypto Rules
Beyond the SEC, lawmakers in the US House of Representatives are gearing up to vote on the Digital Asset Market Clarity Act. That bill would draw a clear line between what the SEC oversees and what falls under the Commodity Futures Trading Commission.
If it passes, the act could spell out terms for “digital commodities,” “securities” and “stablecoins.” Supporters say it would give tokenization backers a clearer path and reduce legal gray zones.
Peirce hinted that the SEC is open to modernizing old rules. “When unique aspects of a technology warrant changes to existing rules or where regulatory requirements are outdated or unnecessary, we stand ready to work with market participants to craft appropriate exemptions and modernize rules,” she said.
But until formal changes arrive, any token tied to a share or an ETF still needs to meet the same standards as a paper‑based security.
Tokenization Brings Both Promise And Risks
Tokenized securities could cut settlement times from two days to near‑instant, and open markets for small investors. Yet risks remain. Buyers must trust custodians who hold the actual assets. If a custodian fails, token holders could lose out.
Featured image from Cheesecake Labs, chart from TradingView
