The SEC of the United States released a statement on security tokenization

ChainCatcher news reports that the U.S. SEC has released a statement on the tokenization of securities, indicating that blockchain technology opens up new models for issuing and trading securities in a "tokenized" form. Tokenization has the potential to facilitate capital formation and enhance investors' ability to use their assets as collateral. Attracted by these possibilities, an increasing number of emerging participants and traditional institutions are actively embracing on-chain products. However, despite the immense potential of blockchain technology, it does not possess the "magic" to change the nature of the underlying assets. Tokenized securities remain securities. Therefore, market participants must carefully consider and comply with the relevant provisions of federal securities laws when trading such instruments.

Sometimes, issuers will tokenize their own securities. Investors purchasing such third-party tokens may face unique risks, such as counterparty risk. Issuers of tokenized securities must also consider their information disclosure obligations under federal securities laws and may refer to recent staff statements issued by the SEC's Division of Corporation Finance.

At the same time, market participants who issue, purchase, and trade tokenized securities should consider the attributes of these securities and the resulting compliance issues under securities law. While blockchain-based tokenization is an emerging technology, the act of "issuing financial instruments representing securities rights" is not novel in itself. Whether issuing such instruments on-chain or off-chain, the applicable legal requirements are the same. Therefore, market participants should consider communicating with the SEC and its staff when designing their tokenization product proposals. We are willing to work with market participants to develop reasonable exemption mechanisms and promote the modernization of rules.