Legal Status of Tokenized Stocks Gains Attention Amid SEC Rule Discussions

The discussion around the legal status of tokenized stocks is gaining renewed attention alongside changes in U.S. securities regulation. In the "Galaxy Brains" podcast by Galaxy Digital, Alex Song and Gabe Shapiro discussed on-chain corporations, tokenized stocks, and the SEC's "Regulation Crypto Assets." On January 28, the SEC described tokenized securities as those whose ownership records are maintained on a crypto network, distinguishing between issuers and third parties that tokenize securities. This distinction impacts investor rights and legal responsibilities. Galaxy Research reported that the SEC proposed "Regulation Crypto Assets" on the 18th. This proposal represents the first U.S. securities rules aimed at the issuance and sale of crypto assets, including provisions for selling certain tokens without a registered public offering and officially defining the end point of investment contracts. The proposal includes a startup exemption of up to $5 million, with larger exemption structures allowing for $20 million or $75 million, though it is still in the proposal stage. Shapiro emphasized that stock tokenization is not the same as Bitcoin or Ethereum, explaining that blockchain records alone do not conclude all rights relationships. The SEC's rule proposal will undergo a comment submission process for 60 days after publication in the Federal Register.