The Securities and Exchange Commission is pushing back against a growing market for “tokenized stocks,” which look like stocks, trade like stocks but don’t actually provide ownership, issuing new guidance that puts third-party synthetic stock products squarely under traditional securities and derivatives rules.
In a joint statement, the SEC’s Divisions of Corporation Finance, Investment Management, and Trading and Markets said tokenized securities fall into two clear categories: those issued or authorized by the underlying company, and those created by third parties without the issuer’s involvement.
The latter category, the SEC warned, often equates to synthetic exposure rather than true share ownership, a distinction that recently became prominent after OpenAI publicly rejected tokenized “equity” tied to its shares offered through Robinhood in Europe.
Tokenization, the SEC said in its statement, does not change the application of federal securities laws. Whether a security is registered on a blockchain or in a traditional database, issuers retain control over ownership records, transfer approvals and shareholder rights.
Only issuer-sponsored tokenized securities, where the company integrates blockchain records into its official shareholder register, can represent true share ownership, the agency said.
In contrast, third-party tokenized shares generally fall into one of two buckets. Some are custody arrangements that represent an equity-backed right held by an intermediary, exposing investors to counterparty and bankruptcy risk.
Others are synthetic instruments, such as linked securities or security-based swaps, that track the value of a share without transferring voting rights, information rights or claims 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 steering compliant tokenization toward issuer-approved, fully regulated structures.
