Global Regulators Urge SEC to Regulate Tokenized US Stocks
A coalition of international regulators and exchange bodies—including ESMA, IOSCO and the WFE—has formally asked the US Securities and Exchange Commission to tighten oversight of tokenized stocks. In a letter to the SEC Crypto Task Force, they warned that tokenized stocks replicate the appearance of US equities but lack legal rights, custody safeguards and investor protections. The group urged the SEC to enforce honest marketing practices and clear rules before tokenized stocks expand across major crypto platforms. They flagged a growing number of brokers and exchanges offering these products under misleading labels. The regulators believe that enhanced supervision and regulatory clarity are essential to protect investors and preserve market integrity as tokenized stocks gain traction.
Neutral
The call for tighter SEC oversight over tokenized stocks is likely to have a neutral impact on the broader crypto market. In the short term, heightened scrutiny may slow the launch and trading volume of new tokenized stock products, potentially weighing on related token prices. However, similar to past instances where clearer regulations (such as the SEC’s guidelines on crypto derivatives) first caused market uncertainty then led to increased institutional participation, this push for transparency could ultimately legitimize tokenized stocks. Over the long term, defined rules and investor safeguards may foster wider adoption and stability in this niche segment without significantly altering Bitcoin or Ethereum trends.