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Mark Uyeda, a commissioner of the U.S. Securities and Exchange Commission (SEC), stated that the agency views tokenized assets as securities based on blockchain technology, which must adhere to the same regulations as any other securities in the stock market.
Uyeda believes that tokenization has moved beyond theoretical discussions and is gradually being applied in practice. Numerous companies are exploring how securities can be issued, stored, and transferred on the blockchain.
According to the commissioner, the current objective of the SEC is not to create an additional set of rules for crypto assets, but rather to apply existing securities laws to blockchain and cryptocurrencies. He is convinced that tokenized versions of securities must comply with securities regulations, as technological advancements do not alter the legal obligations of issuers and crypto platforms regarding disclosure, data storage, and investor protection.
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“Whether tokenization becomes a reality depends on market demand and investor trust. Therefore, SEC regulatory requirements should not impose unnecessary complexities,” added Uyeda.
Recently, the agency announced that tokenized securities fall under securities laws, even if they exist on a blockchain and ownership records are maintained in one or more networks. The Commission considers the only distinction between traditional and tokenized securities to be the method of data storage: the former are stored off-chain, while the latter are stored on the blockchain. Consequently, the agency believes that tokenized assets should be under SEC oversight.
At the end of last year, the SEC released rules for broker-dealers regarding the custody of “tokenized versions of stocks or bonds.” Previously, the agency provided guidance on the custody of cryptocurrencies.
