The Securities and Exchange Commission is fighting a growing market for “tokenized stocks” that look like stocks, trade like stocks, but don’t actually confer ownership, publishing new guidance that places third-party synthetic stock products directly under traditional securities and derivatives rules.
In a joint statement, the SEC’s Divisions of Corporate 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 amounts to synthetic exposure rather than actual stock ownership, a distinction that became salient after OpenAI publicly disowned tokenized “shares” tied to its shares offered through Robinhood in Europe.
Tokenization, the SEC said in its statement, does not alter 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, in which the company integrates blockchain records into its official shareholder registry, can represent true equity ownership, the agency said.
In contrast, third-party tokenized stocks generally fall into one of two groups. Some are escrow arrangements that represent a claim backed by shares held by an intermediary, exposing investors to counterparty and bankruptcy risks.
Others are synthetic instruments, such as linked securities or security-based swaps, that track the value of a share without conveying voting rights, information rights or any claim on the issuer itself.
By formalizing how tokenized stocks are classified, regulators appear intent on limiting the spread of synthetic stock products among retail investors, while directing compliant tokenization toward fully regulated and issuer-approved structures.
