SEC Commissioner Hester Peirce emphasized that tokenized securities are still subject to federal securities laws.

She warned that tokens backed by custodial assets and issued by third parties may carry counterparty risks or face legal uncertainty.

In some cases, such tokens might be classified as “receipts for securities” or “security-based swaps,” potentially making them ineligible for retail trading.

SEC Commissioner Hester Peirce said tokenized securities remain subject to the federal securities laws even when they are represented on a blockchain, arguing that the technology does not change the legal character of the underlying asset. In her July 9, 2025 statement, she warned that products backed by custodial assets and issued by third parties can create counterparty and legal-risk questions, and that depending on the facts they may be treated as a “receipt for a security” or even a “security-based swap,” the latter of which may not be tradeable off-exchange by retail persons.

✨ AI-generated background, compiled from web sources — not editorial content.

More coverage

• Getting Smart – Tokenization and the Creation of Networks for Smart ... (sec.gov)
• SEC Commissioner Hester Peirce Clarifies Distinction Between ... (thedefiant.io)
• There Must Be Some Way Out of Here - SEC.gov (sec.gov)
• The Journey Begins - SEC.gov (sec.gov)

Explore the topic

• Tokenization
• legal
• Hester Peirce
• AWS