Latest SEC Statement: Tokenization Doesn’t Change the Applicability of Federal Securities Laws, Regulation Based on Economic Substance On January 28, 2026, the SEC’s Divisions of Corporation Finance, Investment Management, and Trading and Markets jointly issued the "Statement on Tokenized Securities." It clarifies that tokenization, as a form of technological innovation, does not alter the applicability of federal securities laws, and regulatory determinations are based on economic substance. Key points of the statement: • Tokenized securities refer to securities under federal securities laws (e.g., stocks, bonds), where ownership is fully or partially maintained via blockchain. The form of record-keeping does not affect the applicability of securities laws. • When issuers directly tokenize their own securities, the on-chain or off-chain record-keeping format does not change the applicability of securities laws. Issuance and trading must still comply with registration requirements (unless exempt). • Traditional and tokenized versions of the same class of securities, if substantively identical in rights, can be considered the same class. • Tokenized securities issued by third parties are categorized as custodial (directly representing underlying securities rights) or synthetic (only providing price exposure). The latter may be classified as securities derivatives or swaps, subject to stricter restrictions, with determinations based on economic substance. • Tokenization itself does not create new exemptions. The statement provides market participants with a predictable compliance pathway while emphasizing that technological innovation does not change the fundamental applicability of the existing securities law framework.