The Securities and Exchange Commission is pushing back against a growing market for “tokenized stocks” that look like stocks, trade like stocks, but don’t actually confer ownership, by issuing new guidance that places third-party synthetic stock products directly under traditional securities and derivatives rules.
In a joint statement, the SEC’s Corporate Finance, Investment Management, and Trading and Markets divisions said tokenized securities fall into two clear categories: those issued or authorized by the underlying company and those created by third parties without the involvement of the issuer.
The latter category, the SEC warned, often amounts to synthetic exposure rather than actual stock ownership, a distinction that became more important after OpenAI publicly disavowed tokenized “shares” tied to its stocks 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 recorded on a blockchain or in a traditional database, issuers retain control of ownership records, transfer approvals and shareholder rights.
Only issuer-sponsored tokenized securities, in which the company integrates blockchain records into its official shareholder register, can represent true equity participation, the agency said.
In contrast, third-party tokenized shares generally fall into one of two categories. Some are custodial arrangements that represent a right backed by shares held by an intermediary, exposing investors to counterparty and bankruptcy risk.
Others are synthetic instruments, such as linked securities or security swaps, which track the value of a stock without conferring voting rights, information rights or claims on the issuer itself.
By formalizing how tokenized stocks are classified, regulators appear intent on limiting the spread of synthetic stock products to retail investors while steering compliant tokenization toward fully regulated and issuer-approved structures.
