“I encourage the Commission not to reject third-party equity tokens, but to treat them as what they are: a different class of financial instruments, clearly separated from actual shares.”
Not everyone agrees
Some market participants, however, argue that the STA’s proposal risks bringing together fundamentally different tokenization models.
“The key is whether the tokens represent true stock ownership or just economic exposure,” Dinari CEO Gabe Otte told CoinDesk.
He said many of the STA’s concerns are valid but apply primarily to tokenized synthetic products. He pointed to the SEC’s January statement distinguishing tokenized custodial securities from synthetic structures, arguing that regulated custodial models should be evaluated separately.
“Issuer-sponsored models and custodial models provide 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 benefits by preserving the direct relationship between companies and investors. But he argued that the market is likely to support multiple compliant approaches.
“Innovation is accelerating and we expect many compliant, non-deceptive, economically and technologically meaningful models to emerge as the market matures,” Konevsky said.
Eli Cohen, chief legal officer of tokenization platform Centrifuge that focuses on on-chain provision of funds, said the letter reflects transfer agents’ concerns that issuer-sponsored tokenization could lose traction if third-party models are more widely adopted.
