Pump.fun is back on investors’ radar following a strong rally, raising the question: will the token climb to new records or face a sharp pullback? [...]Pump.fun is back on investors’ radar following a strong rally, raising the question: will the token climb to new records or face a sharp pullback? [...]

SEC Issues Guidance on Tokenized Securities as Institutional Interest Rises

2026/01/29 16:22
2 min read
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In a recent press release, the US Securities and Exchange Commission published formal guidance on how federal securities laws apply to tokenized securities, providing a classification framework for assets recorded on distributed ledgers.

In the joint statement by the SEC’s Divisions of Corporation Finance, Investment Management, and Trading and Markets, a tokenized security is a traditional security that is formatted as a crypto asset, with ownership recorded on a blockchain.

According to the agency, tokenized securities remain securities under US law, despite how crypto-ledgers may view them.

Therefore, the guidance by the US SEC makes it clear that the technological format, whether records are kept onchain or off-chain, does not alter the legal status or registration requirements of the underlying instrument.

The updated guidance comes as the agency moves to clarify rules governing county assets.

The SEC outlined two primary pathways for tokenization: “issuer-sponsored tokenized securities” and “third-party sponsored securities.”

In issuer-sponsored tokenization, the issuer issues or adopts the tokenized format natively, whereas third-party sponsorship involves an external entity creating the tokenized representation.

Regulatory Evolution and Market Context

The SEC’s guidance follows years of regulatory development and market evolution. Initially, the Commission issued its 2017 DAO Report, which was the first to apply securities laws to digital assets. Subsequently, multiple enforcement actions established precedents for token classification.

However, market participants consistently requested formal guidance rather than regulation through enforcement. The 2025 framework directly addresses these longstanding requests for clarity.

Regulation in the digital space is also approaching clarity as policymakers near the final stage. In the US, traders are awaiting the verdict of today’s Senate Agriculture Committee markup of the crypto market bill.

Moreover, the US SEC and the Commodity Futures Trading Commission (CFTC) are set to hold a meeting today to implement the US President’s policies on digital assets.

For the new guidance, the SEC has established a phased implementation timeline. Initial compliance requirements take effect in Q3 2025, with full implementation expected by Q2 2026. This timeline provides market participants with adequate preparation periods.

The guidance arrives as tokenized real-world assets have reached approximately $36 billion in market value, with institutional interest accelerating.

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