The U.S. Securities and Exchange Commission staff issued a joint statement on Jan. 28, 2026, providing greater clarity on the application of the federal securities laws to the category of crypto assets commonly referred to as tokenized securities. The staff introduced the statement as guidance on the taxonomies of tokenized securities to assist market participants in complying with federal securities laws and preparing registration statements, proposals, or requests for submission to the staff or the SEC.
The statement generally categorizes tokenized securities in two groups: (1) issuer-sponsored tokenized securities (i.e., securities tokenized by or on behalf of the issuers of such securities); and (2) third-party sponsored tokenized securities (i.e., securities tokenized by third parties unaffiliated with the issuers of the securities).
The staff emphasizes that a tokenized security may be issued in a number of formats. The issuer-sponsored tokenized security may be the same class of security issued off-chain or on-chain, or, alternatively, represent a separate class of security. For example, a tokenized security may be issued by the issuer or its transfer agent as a crypto asset represented electronically via distributed ledger technology.
For recordkeeping purposes, in this format the issuer maintains its master securityholder file on one or more crypto networks, in lieu of, or in addition to, conventional, off-chain database records. In another model, an issuer may issue a security off-chain in a traditional master securityholder file without representation on a distributed ledger and issue a crypto asset to the security holder. The crypto asset transfer operates to notify the issuer (or its transfer agent) to record the transfer of ownership of the security on the master securityholder file. Regardless of the format, the application of the federal securities laws to the tokenized security remains intact, requiring registration of the token security or an exemption from registration.
Third-party sponsored tokenized securities may be modeled as (1) custodial tokenized securities or (2) synthetic tokenized securities. In the custodial model, the third party issues a crypto asset representing the underlying security, such as a tokenized security entitlement. Third parties, such as clearing agencies, may allow financial market participants to elect to have their security entitlements to third-party-held securities recorded using distributed ledger technology, rather than exclusively through an off-chain centralized ledger.
In the synthetic model, the staff observed that a tokenized security may be a crypto asset representing its own separate security providing synthetic exposure to an underlying security (a linked security). The linked security is issued by a third party providing synthetic exposure to the underlying reference security but is not an obligation of the issuer of the referenced security. A linked security may be a debt security (such as a structured note) or an equity security (such as exchangeable stock), and, under certain circumstances, a linked security may be a “security-based swap.” The third party created security-based swap is a tokenized security that generally provides synthetic exposure to, among other things, either a referenced security or certain referenced events relating to an issuer of a referenced security. The third party may not offer or sell the crypto asset representing the security-based swap to persons who are not eligible contract participants unless a Securities Act registration statement is in effect as to the crypto asset, and the transactions in the crypto asset are affected on a national securities exchange.
The staff emphasized that the economic realities of these third-party-created synthetic tokenized security products are determinative rather than the name given to the instrument in assessing regulation of security-based swaps and linked securities.
The Divisions of Corporation Finance, Investment Management, and Trading and Markets issued the joint statement. The tokenized securities framework is the first in an anticipated series of guidelines and proposed rulemaking clarifying crypto asset regulation that SEC Chairman Paul Atkins pledged as a high priority during his term.
*Special thanks to Of Counsel Erika Cabo for contributing to this GT Alert.