The U.S. Securities and Exchange Commission is pushing back against the growing market for “tokenized stocks,” which look and trade like stocks but don’t actually confer ownership, and issued new guidance that would bring third-party synthetic stock products entirely under traditional securities and derivatives rules.
Tokenized securities fall into two categories: securities issued or authorized by the underlying company, and securities created by third parties without involvement of the issuer, the SEC’s Divisions of Corporate Finance, Investment Management, and Trading and Markets said in a joint statement.
The SEC has warned that the latter category often amounts to synthetic exposure rather than true equity ownership, a distinction that gained new prominence after OpenAI publicly denied tokenized “equity” tied to shares it issued through Robinhood in Europe.
The SEC said in a statement that tokenization would not change the application of federal securities laws. Whether securities are recorded on the blockchain or in a traditional database, the issuer retains control over ownership records, transfer approvals, and shareholder rights.
The agency said that only issuer-sponsored tokenized securities (where a company integrates blockchain records into its official shareholder register) can represent real equity.
In contrast, third-party tokenized shares typically fall into one of two categories. Some are escrow arrangements that represent rights backed by shares held by intermediaries, exposing investors to counterparty and insolvency risks.
Other instruments are synthetic instruments, such as linked securities or security-based swaps, which track the value of a stock without conveying voting rights, information rights, or any claim on the issuer itself.
By formalizing how tokenized shares are classified, regulators appear intent on limiting the spread of synthetic equity products to retail investors while moving compliant tokenization toward an issuer-approved, fully regulated structure.
