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SEC Commissioner Hester Peirce Warns on Legal Status of Tokenized Securities

Hester Peirce emphasizes caution, stating that tokenizing a security doesn't alter its regulatory classification, and it may still be considered a security-based swap.

Summary

SEC Commissioner Hester Peirce cautioned that tokenizing a security does not change its legal status. She warned that such tokens could still be classified as security-based swaps and urged careful consideration in their handling.

Terms & Concepts
  • Tokenization: The process of converting rights to an asset into a digital token on a blockchain, often used in the context of securities or other financial instruments.
  • Security-based swap: A financial derivative involving a swap agreement that is based on the value of a security, which may trigger regulatory requirements from bodies like the SEC.