As digital assets continue to reshape the financial landscape, the U.S. Securities and Exchange Commission (SEC) has made it clear that innovation must still play by the rules. In her latest remarks, SEC Commissioner Hester Peirce, widely known as the “Crypto Mom,” emphasized that tokenized securities are still securities — and must comply with existing U.S. laws.
What Are Tokenized Securities?
Tokenized securities are traditional financial assets, like stocks or bonds, that have been digitized and recorded on a blockchain or distributed ledger. Instead of issuing physical certificates or using centralized databases, companies can issue tokenized versions of assets that are easily transferable and potentially more accessible.
These digital tokens promise faster settlement, transparency, and even fractional ownership. However, their status as securities means they are not exempt from legal and regulatory scrutiny.
“A Token Is Still a Security If It Acts Like One”
Speaking at a recent fintech conference, Commissioner Peirce reiterated the SEC’s position that form does not override function. If a digital token meets the criteria of a security — including offering investment returns tied to the performance or efforts of others — then it must follow the laws that govern securities.
“Calling something a token doesn’t mean it’s not a security,” Peirce said. “If it walks, talks, and acts like a security, then that’s how we’ll treat it.”
This straightforward stance reflects the SEC’s ongoing mission: to protect investors and maintain fair, orderly markets, even as new technologies emerge.
A Longtime Advocate for Balanced Innovation
Though she echoed the Commission’s position, Peirce also acknowledged the gaps and complexities facing blockchain innovators. She has previously proposed a “safe harbor framework” that would give blockchain startups a grace period to develop their networks and products before needing to comply with full registration requirements.
While the safe harbor proposal has yet to be adopted by the SEC, it has sparked important conversations about how regulation can evolve alongside innovation.
Why This Matters for the Crypto Market
Tokenized assets are attracting interest from both startups and large financial institutions looking to modernize infrastructure and reduce costs. From real estate to treasury bonds, tokenization could improve efficiency, increase market access, and unlock new investment models.
However, regulatory clarity remains a key concern. Peirce’s comments serve as a reminder that, despite the new format, the underlying obligations remain unchanged. Issuers of tokenized securities must follow the same disclosure, registration, and compliance procedures as their traditional counterparts.
Enforcement Will Continue
The SEC has already taken action against several crypto projects for offering tokenized securities without proper registration. Peirce noted that technological innovation won’t be treated as an excuse for bypassing the law.
“We’re not saying no to blockchain or tokenization,” she added. “We’re saying yes to responsible, law-abiding innovation.”
The Path Forward
For fintech firms and crypto entrepreneurs, the takeaway is clear: tokenization doesn’t eliminate compliance responsibilities. Projects in the space need to work with legal counsel and regulatory bodies to ensure they meet U.S. standards.
That said, Peirce’s continued advocacy for thoughtful reform suggests that more nuanced and tech-forward approaches could still emerge — especially as the digital asset economy matures.
Final Thought
Tokenized securities hold enormous promise for transforming global finance, but they must evolve within legal boundaries. As Commissioner Peirce’s remarks reaffirm, innovation and regulation must move together — not in opposition.