🎉 #Gate Alpha 3rd Points Carnival & ES Launchpool# Joint Promotion Task is Now Live!
Total Prize Pool: 1,250 $ES
This campaign aims to promote the Eclipse ($ES) Launchpool and Alpha Phase 11: $ES Special Event.
📄 For details, please refer to:
Launchpool Announcement: https://www.gate.com/zh/announcements/article/46134
Alpha Phase 11 Announcement: https://www.gate.com/zh/announcements/article/46137
🧩 [Task Details]
Create content around the Launchpool and Alpha Phase 11 campaign and include a screenshot of your participation.
📸 [How to Participate]
1️⃣ Post with the hashtag #Gate Alpha 3rd
Tokenization of the stock market is "braking": SEC commissioner clarifies that tokenized securities still fall under the category of securities.
Compiled by: Felix, PANews
As major companies intensify their efforts to introduce tokenized stocks into the U.S. market, SEC Republican Commissioner Hester Peirce stated in a statement on July 9 that while blockchain technology is powerful, it does not possess the magical ability to change the nature of the underlying asset. Tokenized securities are securities in themselves and must comply with federal securities laws.
In addition, Hester Peirce emphasized in her statement that tokenized stocks, notes, or rights "are still securities," requiring issuers, intermediaries, and traders to comply with current federal laws when creating, selling, or transferring these securities.
Hester Peirce's statement indicates that tokenization can be done in two ways: the issuer can mint a blockchain version of its own stock, or a custodian can wrap third-party securities and issue receipts.
"Sometimes, issuers will tokenize their securities. For example, an operating company or an investment firm may tokenize its shares. Alternatively, a non-affiliated third party that holds securities issued by other entities may issue new tokenized securities linked to the securities it holds or tokenize the 'security interests' held by investors against the custodian."
Hester Peirce warned that the second model would introduce counterparty risk, as token holders rely on the custodian's solvency and control over the underlying stocks.
Hester Peirce also pointed out that distributors of tokenized securities must consider their disclosure obligations under federal securities laws, referring to the staff statement recently issued by the SEC's Division of Corporation Finance on this topic. Furthermore, market participants should meet with the Commission and its staff as early as possible when constructing their tokenized products.
"Market participants involved in the distribution, purchase, and trading of tokenized securities should also consider the nature of these securities and their implications under securities law. For instance, depending on the specific circumstances, a token may be a 'security receipt,' which itself is a security but different from the underlying security held by the token distributor. Alternatively, if the token does not confer to the holder legal and beneficial ownership of the underlying security, it may be a 'security-based swap,' which retail investors cannot trade over-the-counter. While blockchain-based tokenization is an emerging phenomenon, the process for issuing instruments that represent securities is not. The on-chain and off-chain versions of these instruments are subject to the same legal requirements."
In response to this statement, ConsenSys lawyer Bill Hughes summarized on the X platform, "In short: we have heard some crazy stories about your plans to launch tokenized U.S. stocks, and you need to seriously hit the brakes. Let's meet and discuss whether it is necessary to seek an exemption or modify the rules. But don't get me wrong, securities laws apply on-chain and off-chain equally."
Bloomberg ETF analyst James Seyffart commented on platform X that Hester Peirce's clarification sounds like a warning to all companies and protocols planning to build a securities tokenization bridge, somewhat like "Hey, pay attention."
It is worth mentioning that currently, crypto companies including Coinbase and Kraken have shown interest in launching tokenized stocks. If they receive approval from the U.S. Securities and Exchange Commission, they will be able to offer blockchain-based trading of traditional stocks, thereby competing directly with other more traditional financial brokerage firms.
Paul Atkins, the Republican chairman of the U.S. Securities and Exchange Commission, stated during an interview with CNBC last week that the agency should encourage innovation when asked about the prospects of security tokenization.
Critics have stated that this new technology may become a means to circumvent SEC regulation and expose retail investors to new risks.
Senator Elizabeth Warren stated that a cryptocurrency market structure bill, the "CLARITY Act," which is about to be voted on in the House of Representatives, includes a provision that "allows non-crypto companies to tokenize their assets to circumvent U.S. SEC regulations." "According to the House bill, public companies like Meta or Tesla could easily evade U.S. SEC oversight simply by deciding to put their stocks on the blockchain."
Related reading: Tokenized stocks become the new favorite in crypto, what about altcoins?