“I encourage the Commission not to dismiss third-party equity tokens, but to treat them as what they are: a different class of financial instrument, with a clear separation from actual equity.”
Not everyone agrees
However, some market participants say the STA proposal risks lumping together fundamentally different tokenization models.
“The key is whether the tokens represent true equity ownership or simply economic exposure,” Dinari CEO Gabe Otte told CoinDesk.
He said many of the STA’s concerns are valid, but they primarily apply to synthetic tokenized products. He pointed to the SEC’s January statement, which distinguishes custodial tokenized securities from synthetic structures, arguing that regulated custody models should be evaluated separately.
“Both issuer-sponsored and custodial models offer true equity ownership and should be distinguished from synthetic models for the benefit of the end investor,” Otte said.
Alan Konevsky, CEO of digital securities platform tZERO, agreed that issuer-sponsored tokenization offers significant advantages by preserving the direct relationship between companies and investors. But he argued that the market is likely to support multiple enforcement approaches.
“Innovation is accelerating and we expect multiple compatible, non-deceptive, and economically and technologically significant models to emerge as the market matures,” Konevsky said.
Eli Cohen, chief legal officer at tokenization platform Centrifuge, which focuses on bringing funds on-chain, said the letter reflects transfer agents’ concerns that issuer-sponsored tokenization could lose ground if third-party models are more widely adopted.
