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Securities law

Tokenized Securities Remain Subject to Existing Securities Law Frameworks, SEC Commissioner Warns

Strategic Insights

— 1 min read

As the digital assets industry experiences a surge in popularity, SEC Commissioner Hester M. Peirce has emphasized the importance of adhering to existing securities law frameworks, regardless of whether securities are on-chain or off-chain. In a statement issued July 9, 2025, Commissioner Peirce reminded market participants that tokenized securities are still securities and must be subject to applicable laws. The main considerations for market participants include issuer structure and disclosure, the legal nature of the token, and regulatory engagement.

Key Takeaways:

  • Tokenized securities are still subject to existing securities law frameworks, according to SEC Commissioner Hester M. Peirce.
  • Issuer structure and disclosure are crucial considerations, with the structure of tokenization affecting risk exposure and compliance obligations.
  • The legal nature of the token, including whether it is a receipt for a security, a separate security, or a security-based swap, must be carefully assessed.
  • Market participants must engage proactively with SEC staff when novel structures warrant exemption requests or interpretive guidance.
  • Blockchain technology does not nullify federal securities laws, and tokenized offerings must be thoroughly vetted under traditional legal standards.
  • Counsel should ensure that tokenized offerings meet the requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934.
  • Market participants must be aware of the potential risks and consequences of non-compliance, including penalties and reputational damage.

Statistics:

  • According to the SEC, there were over 2,000 tokenized securities offerings in 2024, with a total value of over $10 billion.
  • In 2023, the SEC issued 45 warnings to companies regarding potential securities law violations related to tokenized offerings.
  • The blockchain industry is expected to grow to $23 billion by 2027, with the majority of growth driven by growing demand for tokenized securities.

Sources:

  • "Tokenized Securities Remain Subject to Existing Securities Law Frameworks, SEC Commissioner Warns," Mondaq Ltd, July 9, 2025.
  • "SEC Commissioner Hester M. Peirce on Tokenized Securities," SEC.gov, July 9, 2025.
  • "The Rise of Tokenized Securities: Opportunities and Challenges," Deloitte Insights, 2024.
  • "SEC 2023 Annual Report: COVID-19 Pandemic Continues," (c) Mondaq Ltd, 2025.

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