SEC Commissioner Urges Crypto Firms to Comply with Federal Securities Laws for Tokenized Assets

US Securities and Exchange Commission (SEC) member Hester Peirce, known for her pro-crypto stance, issued a statement clarifying that tokenized securities remain subject to federal securities laws. Peirce's remarks came as the crypto industry continues to explore the potential of tokenized assets, with traditional firms and new entrants embracing onchain products. The SEC commissioner, who also heads the agency’s crypto task force, urged companies to engage with SEC officials before launching tokenized offerings, emphasizing that blockchain technology does not alter the nature of the underlying asset.

Peirce's warning follows the launch of a tokenization-focused layer-2 blockchain by a trading platform, which aims to offer tokenized US stocks and exchange-traded products to investors. The company had reportedly submitted a proposal to the SEC for a framework to regulate tokenized real-world assets in May, indicating an awareness of the potential impact on US securities laws. Peirce's statement echoed those of former SEC Chair Gary Gensler, who frequently called on companies to engage with officials regarding crypto-related products that could be regarded as securities.

The SEC's stance on tokenized securities comes as Republican lawmakers in the US House of Representatives plan to move forward with consideration of a bill to establish clear regulatory rules for digital assets. The proposed Digital Asset Market Clarity Act aims to clarify the roles of the SEC and the Commodity Futures Trading Commission (CFTC) in regulating crypto in the US. Peirce's remarks suggest that the SEC is open to working with market participants to modernize rules and craft appropriate exemptions where necessary. However, the agency remains committed to ensuring that federal securities laws are adhered to when transacting in tokenized securities.

Peirce's statement underscores the SEC's commitment to regulating the crypto industry, despite the agency's suggestion that it was moving in a new direction for the crypto industry since the inauguration of US President Donald Trump and the confirmation of SEC Chair Paul Atkins. The SEC's stance on tokenized securities is a reminder to companies that they must consider and adhere to federal securities laws when transacting in these instruments, regardless of the underlying technology.