From Vinyl to Token Ledgers

Atkins described the migration from traditional securities ledgers to blockchain platforms, highlighting the potential of tokenized securities, as reminiscent of music’s transition from analog to digital. Just as digitization revolutionized how music is consumed—from vinyl to streaming. Converting securities into digital tokens could reshape how they’re created, traded, and utilized. He emphasized that smart contracts could automate processes like dividend distribution. They could also broaden access to previously illiquid assets and support entirely new market structures.

We Assist Our Clients With Token Securities Offerings

Building the Rules

Atkins called for a forward-thinking, consistent regulatory approach for crypto markets—covering token issuance, custody, and trading. He supports clarifying rules for registered broker-dealers and alternative trading systems (ATSs). This includes enabling them to handle both securities and non-securities. A central theme: the SEC must strike a successful balance between supporting innovation and protecting investors.

Tokenized Securities Remain Securities

Backing these remarks, SEC Commissioner Hester Peirce—often known as “Crypto Mom”—issued a statement on July 9, 2025. She affirmed that blockchain doesn’t alter the legal status of an asset. If you digitize a security, it remains a security under U.S. law. Issuers and distributors should ensure compliance with federal securities regulations. They should work with SEC staff on any necessary exemptions or rule updates.

Structural and Compliance Considerations

Peirce highlighted that tokenized offerings may take the form of security receipts or security-based swaps, depending on their design. Each structure triggers different regulatory obligations. This means disclosure duties and oversight still apply. She also warned of additional risks when third-party entities tokenize assets they hold. Potential issues like counterparty exposure arise in such setups.

A Regulatory Dialogue Ahead

Atkins urged the SEC to engage with market participants in June 2025. They aim to tailor exemptions and modernize existing regulations for on-chain assets. His goal is to prevent over-regulation that would drive innovation offshore while holding bad actors to account. The establishment of the Crypto Task Force shows the agency’s evolving stance. It demonstrates the coordinated stance toward meaningful crypto-focused rulemaking.

Bottom Line

- Tokenization holds real promise—automating classic processes, unlocking liquidity, and fostering novel market use cases. - But regulation still matters—digital tokens tied to traditional securities fall within the scope of U.S. securities laws. - The SEC is actively adapting, aiming to support innovation without sacrificing investor protections or legal clarity.

If you need help registering tokenized securities please contact us at (646) 386-0800.