There is only one way to represent real effects on the chain, and that is through “native” tokenizationCarlos Domingo, CEO of BlackRock-Backed Digital Asset Securities Firm Securitize, said Decrypt On Thursday.
That distinction could become more important, because the experiment of companies with safety-based tokens possibly confuses investors and a concern that was led by the US Securities and Exchange Commission earlier this week.
A share that is native encouraged EthereumFor example, would have the same fixed rights that investors receive when buying shares through traditional resources, such as votes or dividend rights, Domingo said. Native tokenized assets also have no counterparty risk, while he avoids fragmentation problems, he added.
BlackRock’s $ 2.8 billion USD Institutional Digital Liquility Fund (Buidl), which Securitize helped in the introduction of last year, is native tokenized because, as a transfer agent for the asset manager, the company directly explained and recorded the shares of the fund. Transfer agents usually use their own databases instead of a blockchain.
“Token represents 100% of the security,” said Domingo, pointing to the shares of the Crypto software platform Exodus as another example. “One token represents one share.”
Exodus -shares set Trade as tokens on the Securitize platform in 2022, but this year the interest in tokenization has been renewed, with Robinhood unveiling Tokenized stock trade on Ethereum Layer-2 Scaling Network Arbitrum last month, and Kraken pink Xstocks on Solana and other networks such as BNB chain.
In one rack On Tuesday, SEC Commissioner and Crypto Task Force Baas Hester Peirce advised that companies are structuring Tokenized offers, given their obligation to adhere to the federal securities laws, should consider meeting the regulator. Tokenization offers no exemption from existing rules and regulations, underlined them.
“As powerful as blockchain technology is, it has no magical skills to transform the nature of the underlying property,” she wrote. “Tokenized effects are still effects.”
Anthony Tu-Sekine, a partner at Seward and Kissel LLP who leads the company’s blockchain and digital assets, said Decrypt That the conversation about tokenization relates to crypto, but at the end of the day it is about checking effects under existing securities laws.
“People sometimes feel that crypto, because of the nature of the blockchain, must be less regulated,” he said. “That’s not what we are talking about here.”
In some ways, Peirce’s statement represented a warning for investors, not long after Chatgpt Maker OpenAi denounce Robinhood’s step to offer so -called stocks in Europe that are linked to equity in the technical treasure. In response, Robinhood said that his tokens give “indirect exposure to private markets” as “tokenized contracts that follow their price.”
Pierce did indeed say in her recent statement that a tokenized security, depending on the circumstances, could resemble “security rights” or a “safety-based swap”, in contrast to equity in a private or public company.
The Robinhood stocks have some functions that resemble creating a controlled environment for the product. American customers are excluded from buying equity tokens, they cannot be sent to other portfolios or platforms and users must be kyc-rewarded via identifying information.
Kraken also does not allow us to buy Xstocks, but the tokens, which is published by a company called back, are permissionless, which means that they can be freely traded on a decentralized exchange or independently accepted by a platform.
Because the SEC encourages market participants to consider federal effects, the supervisor tries to adhere to a Crypto cooperation approach among US President Donald Trump, as reflected by one round table discussion About tokenization organized by the SEC in May.
“In recent history we seem to have forgotten a very fundamental concept: that investors and emennials have valuable observations and experiences,” SEC commissioner Mark Uyeda said.
BinanceThe world’s largest crypto exchange and now defeated crypto exchange FTX once cut In Tokenized stock trade – but those products were ultimately suspended.
Crypto -credit platform Abra started to offer contracts as tokens To customers in 2019 with which they were exposed to price moments of certain stocks and listed funds listed by the US. The company “kept voluntarily on offering” the tokens after cooperation with a SEC investigation, according to a CFTC submit.
In 2020, the SEC and CFTC ABRA ordered to pay a fine of $ 150,000 for each agency for offering unregistered effects and entering into illegal off-Exchange Swaps trade. Abra agreed“Without admitting or refusing the findings.”