The US Securities and Exchange Commission’s Trading and Markets Division has explained how brokerage firms can hold tokenized stocks and bonds while staying within current investor protection rules.
The division said it would not challenge broker-dealers who consider themselves to have custody of crypto asset securities, as long as they meet certain requirements for security, operations, and oversight.
This applies only to digital versions of regulated assets, such as tokenized shares or bonds.
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Although this is not a new rule, it helps firms understand how tokenized assets fit under existing laws. The main takeaway is that tokenized securities will be treated the same as traditional ones, even when they operate on blockchain systems.
At the center of this guidance is Rule 15c3-3, which requires broker-dealers to maintain control or possession of customer securities. The division noted that blockchain-based assets could comply with this rule if the broker holds full control over the private keys that manage them.
This means customers or third parties, including affiliates, should not be able to move or use the tokens without the broker’s approval. The approach draws a clear line between regulated securities custody and the self-custody model common in the cryptocurrency industry.
Firms must also prepare for possible blockchain-related disruptions, such as network attacks, chain splits, or airdrops. They are expected to have plans for situations where assets could be frozen, seized, or transferred under legal orders.
On December 18, the Federal Reserve revoked a policy that had prevented some US banks from engaging in cryptocurrency services. What did the agency say? Read the full story.
