“I’d encourage the Commission not to dismiss third-party stock tokens, but to treat them as what they are — a different class of financial instrument, with clear separation from real stocks.”
Not everyone agrees
Some market participants, however, say the STA’s proposal risks grouping together fundamentally different tokenization models.
“The key is whether the tokens represent true stock ownership or just economic exposure,” Dinari CEO Gabe Otte told CoinDesk.
He said many of the STA’s concerns are valid but apply primarily to synthetic tokenized products. He pointed to the SEC’s January statement, which distinguishes custodial tokenized securities from synthetic structures, arguing that regulated custodial models should be evaluated separately.
“Both issuer-sponsored and custodial models offer true stock ownership and these should be distinguished from synthetic models for the benefit of the end investor,” Otte said.
Alan Konevsky, CEO of digital securities platform tZERO, agreed that issuer-sponsored tokenization offers important advantages by preserving the direct relationship between companies and investors. But he argued the market is likely to support multiple compliant approaches.
“Innovation is accelerating, and we expect multiple compliant, non-misleading, economically and technologically meaningful models to emerge as the market matures,” Konevsky said.
Eli Cohen, chief legal officer at tokenization platform Centrifuge that focuses on bringing funds onchain, said the letter reflects transfer agents’ concerns that issuer-sponsored tokenization could lose ground if third-party models become more widely adopted.