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Matthias Knab, Opalesque for New Managers: The SEC's Division of Corporation Finance, Investment Management, and Trading and Markets issued a comprehensive staff statement on January 28 providing regulatory clarity on tokenized securities-a development that institutional investors have been awaiting as digital asset infrastructure continues to evolve.
The statement establishes clear taxonomies for tokenized securities and confirms a fundamental principle: the format in which a security is issued does not alter the application of federal securities laws. Whether maintained on a blockchain or in traditional databases, securities remain subject to the same registration requirements, regulatory oversight, and compliance obligations.
Issuer-Sponsored Tokenization: Two Distinct Models
The SEC identifies two approaches for issuers tokenizing their own securities. In the first model, distributed ledger technology becomes part of the master securityholder file itself. When a crypto asset transfers on-chain, ownership simultaneously transfers in the issuer's official records. This represents a fundamental integration where the blockchain serves as the actual record-keeping system, supplemented by off-chain data linking wallet addresses to investor identities.
The second model maintains traditional off-chain recordkeeping while using crypto assets as notification mechanisms...................... To view our full article Click here
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