Tokenized Securities Remain Under Federal Law, SEC Commissioner Peirce Affirms on July 9

Washington D.C. – U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce reiterated on July 9, 2025, that tokenized securities are unequivocally subject to existing federal securities laws. Her statement, titled "Enchanting, but Not Magical: A Statement on the Tokenization of Securities," emphasized that blockchain technology does not alter the fundamental nature of an asset. This clarification comes amidst increasing interest from traditional financial institutions and crypto firms in tokenizing real-world assets.

Commissioner Peirce stressed that market participants engaging with these instruments must adhere to all federal securities regulations. "Tokenized securities are still securities," Peirce stated, adding, "Accordingly, market participants must consider—and adhere to—the federal securities laws when transacting in these instruments." Her remarks underscore the SEC's consistent position that innovation in financial technology does not create an exemption from established legal frameworks designed for investor protection and market integrity.

The statement serves as a clear directive to companies, including those like Coinbase and Kraken exploring tokenized stocks, and Robinhood, which recently launched a tokenization-focused layer-2 blockchain. While acknowledging the potential of tokenization to facilitate capital formation and enhance asset utility, Peirce warned against the misconception that blockchain confers a "magical" ability to bypass regulatory oversight. This aligns with broader efforts by the SEC, particularly through its Crypto Task Force led by Peirce, to provide regulatory clarity.

Peirce also extended an invitation for collaboration, stating, "Market participants, as they structure their tokenization product offerings, should consider meeting with the Commission and its staff." She affirmed the SEC's readiness to work with the industry to craft appropriate exemptions and modernize rules where unique technological aspects warrant changes or existing regulations are outdated. Analysts, such as Bloomberg's James Seyffart, view Peirce's statement as a significant warning to all entities developing tokenized securities.

The SEC's stance highlights the ongoing regulatory balancing act between fostering innovation and ensuring robust investor protections. As discussions continue around legislative efforts like the proposed Digital Asset Market Clarity Act, which aims to clarify regulatory roles for digital assets, the Commission maintains that current laws are applicable. This ensures that the foundational principles of securities regulation remain intact, regardless of the technological format of the asset.