Tokenized shares: what the SEC's stated position actually says
Issuing a share as a token does not stop it being a security. A statement by SEC Commissioner Hester Peirce dated 9 July 2025 says so plainly, and draws a line between a token issued by the company itself and one issued by a third party. We set out what the statement says.
In short
A company's shares can be represented as a token on a . This is called a tokenized security, and the argument turns on one question: does the token form change the legal character of the asset?
A statement by SEC Commissioner Hester Peirce dated 9 July 2025 answers directly:
"Tokenized securities are still securities."
And it says what the technology cannot do:
"As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset."
The form changes, the obligation does not
The practical consequence: an instrument trading on chain does not fall outside securities law.
"Market participants must consider—and adhere to—the federal securities laws when transacting in these instruments."
Disclosure obligations stand as well: the statement says distributors of tokenized securities must consider their disclosure obligations under the federal securities laws.
Two different tokens, two different risks
Biggest uncertainty The text is one commissioner's statement, not a binding Commission rule, and it is dated 9 July 2025.
This is the statement's most useful distinction. Both get called a "tokenized share" and they are not the same thing:
- The issuer's own token. The company tokenizes its own shares. The counterparty is the company that issued the share in the first place.
- A third party's token. Another institution holding the shares issues a token tied to them. The statement notes this creates unique risks, counterparty risk in particular.
In the second case what you hold is not the share but an institution's undertaking regarding the share. If that institution cannot meet the undertaking, the token stands behind nothing.
This is a commissioner's statement, not a rule
The text is a statement, not a binding Commission decision or a rule in force. It reflects the position of a single commissioner.
The date matters too: the statement is from 9 July 2025. Being quoted in current arguments does not make it a new development.
Risks
Biggest uncertainty The text is one commissioner's statement, not a binding Commission rule, and it is dated 9 July 2025.
- The "tokenized" label does not tell you the counterparty. Two products under the same name may come from the issuer or from an intermediary, and their risk profiles differ.
- A third party token carries counterparty risk. That is the statement's own emphasis; the token is an undertaking about the share, not the share.
- A commissioner's statement is not a rule in force. Application depends on Commission decisions and court interpretation.
- This is not legal advice. For your own situation the published text and a lawyer are the places to look.
What was not examined is listed in the data status above.
Sources
This article rests on the sources below. Whether each has a permanent copy is stated next to it.
- #1
Primary source for tokenization not changing legal character and for the issuer versus intermediary distinction: SEC Commissioner Hester Peirce's statement of 9 July 2025.
sec.gov· our own copy· archive copy· no screenshot
Evidence chain: 1 sources
Tweets get deleted, sites go down. Below is whether a durable copy exists for each source.
Sources (1)
- #1
Primary source for tokenization not changing legal character and for the issuer versus intermediary distinction: SEC Commissioner Hester Peirce's statement of 9 July 2025.
“As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset.”
sec.gov/newsroom/speeches-statements/peirce-statement-tokenized-securities-070925our own copyopen in a new tab - no screenshot captured
- archived copy
- captured on Sep 5, 2026, 7:44 PM
content hash
3f70ffc0d8…3d8855
Correction history
Articles are never deleted, only corrected. Every change appears here.
- Version 2 ·
Correction:
- Version 1 ·
Quotations