SEC’s Hester Peirce Warns Tokenized Stocks Must Follow US Laws

* SEC Commissioner clarifies tokenized securities fall under federal regulations. * Senate hearing raises concerns over regulatory loopholes. On July 9, 2025, The Block reported that SEC Commissioner Hester Peirce reaffirmed that tokenized securities are classified as securities under federal law. Speaking after a Senate Banking Committee hearing on digital assets, Peirce addressed common misconceptions about their regulatory status. During the hearing, Senator Elizabeth Warren expressed concerns that tokenization could enable companies to sidestep traditional SEC oversight. Peirce clearly warned distributors of tokenized securities that they must comply with federal disclosure obligations. On July 9, in comments made after the Senate hearing, SEC Commissioner Hester Peirce stated, "As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset...Tokenized securities are still securities." Her remarks come amid rising interest from financial firms like Coinbase and Kraken in the blockchain-based trading of traditional equities. With this clarification, Peirce sent a clear signal to these firms and others building tokenization infrastructure that compliance with existing regulations remains non-negotiable. On July 9, Bloomberg Intelligence ETF analyst James Seyffart commented, "Peirce's warning is a clear message to all the companies and protocols planning to build bridges for tokenizing securities." He also noted that while the SEC may be showing greater openness to crypto-related innovations in recent years, tokenized securities must strictly adhere to established legal frameworks. The ongoing discussions reflect broader debates within the finance industry, which is exploring how blockchain and tokenization could transform trading practices while still complying with stringent regulatory standards. Meanwhile, according to CoinMarketCap on July 9, Ethereum (ETH) was trading at $2,135 as of 12:00 UTC, representing a 1.8% increase in 24-hour trading volume.