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Wall Street Takes Tokenized Securities Case to SEC, Flags DeFi Implications

The SEC aims to prevent synthetic equity exposure to retail investors by enforcing existing securities and derivatives rules on third-party tokenized products, clarifying regulatory distinctions.

  • On Tuesday, the U.S. Securities and Exchange Commission published a memo after a meeting requested by SIFMA, Cahill Gordon & Reindel LLP, Citadel LLC and JPMorgan Chase & Co., stating tokenization does not change federal securities law application.
  • Industry representatives asked the SEC for formal rulemaking Tuesday as five Wall Street firms met with the SEC's Crypto Task Force, urging against broad exemptive relief for tokenized securities.
  • The SEC's joint statement classified tokenized instruments into issuer-sponsored tokenized securities, representing true equity ownership, and third-party tokenized stocks, including custodial entitlement arrangements and synthetic instruments exposing investors to risks.
  • Regulators signaled protections to preserve investor rules by limiting synthetic-equity products for retail investors and promoting issuer-approved, fully regulated structures in blockchain-based trading models.
  • Speaking Wednesday at a SIFMA roundtable, Jamie Selway said some non-equity markets operate 24-by-7 and expanding hours could boost U.S. market competitiveness with shared infrastructure and protocols.
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The Divisions of Corporation Finance, Investment Management, and Trading and Markets of the SEC said they are sharing staff criteria on taxonomy related to tokenized values, with the aim of clarifying how federal securities laws apply as onchain activity grows. In the statement, the SEC defines a tokenized value as a financial instrument that meets the legal definition of “security”, but is formatted as, or represented by, a cryptoactive, with p…

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Blockchain is supposed to revolutionize stock trading – but for US stock exchange supervision, it is not technology that counts, but law. What this means for the future of tokenisation. Source: BTC-ECHO BTC-ECHO

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Coin Desk broke the news in Manila, Philippines on Wednesday, January 28, 2026.
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