SEC Says Tokenized Assets Are Securities First, Technology Second

Core Viewpoint - The SEC has clarified that tokenized assets are subject to the same registration requirements as traditional securities, regardless of their format or method of record-keeping [1][2]. Group 1: Legal Status of Tokenized Securities - Tokenized securities are still considered securities under federal laws, and the method of issuance or record-keeping (on-chain vs. off-chain) does not alter this status [1][2]. - Issuers can offer tokenized securities either as a separate class or alongside traditional shares, provided they confer similar rights and privileges [3]. Group 2: SEC's Approach to Crypto - The SEC's recent guidance reflects a shift in its approach to cryptocurrency regulation, having previously dropped or closed numerous cases related to whether certain crypto products are unregistered securities [4][5]. - The statement does not address the ongoing debate regarding whether specific crypto-native products, such as tokens and staking programs, should be classified as securities [5]. Group 3: Ethereum Investigation - The SEC had previously authorized an internal investigation into "Ethereum 2.0," treating it as a security, which contrasts with public statements from former SEC Chair Gary Gensler regarding ether's status [6][7]. - The investigation was later closed without any enforcement action, highlighting the ambiguity surrounding the classification of Ethereum and similar assets [7].