Blockchain technology has enabled the tokenization of securities, offering new ways to distribute and trade assets.
Despite the transformative potential of blockchain, tokenized securities are still subject to federal securities laws.
Tokenization can involve issuer tokenizing its own security or a third party creating tokenized securities tied to underlying assets, introducing unique risks like counterparty risks.
Market participants in tokenized securities must comply with disclosure obligations, consider the nature of these securities, and align with securities laws implications.