Tokenized Securities: Same Rules, Smarter Rails – And Where RedSwan Fits In

Tokenization has officially moved from the regulatory gray zone into a defined playbook. The SEC’s recent statement on tokenized securities makes one principle unmistakably clear: a tokenized security is still a security under U.S. federal law; blockchain is simply a new record‑keeping format, not a new legal category. For serious issuers, platforms, and investors, this reframing turns tokenization from a speculative experiment into an implementable, regulated strategy.

Under this guidance, every tokenized stock, bond, fund interest, or real estate interest must comply with the exact same disclosure, registration, custody, and trading rules as its traditional equivalent. The opportunity is not to escape regulation, but to modernize the market’s plumbing while preserving the investor protections that institutional capital expects.

The SEC’s Two Core Tokenization Models

To reduce confusion, the SEC effectively groups tokenized securities into two practical models that business, legal, and technology teams can align around.

• Issuer‑sponsored tokenized securities. In this model, the issuer (or its appointed agent) integrates distributed ledger technology into the official securityholder records, so an on-chain token transfer corresponds to a real, legal change in ownership. The issuer remains at the center of the cap table while using blockchain to improve settlement speed, transparency, and lifecycle management.
• Third‑party tokenized securities. Here, an intermediary, not the issuer, creates a token tied to another security. Sometimes the intermediary actually holds the underlying security (a custodial, “depositary receipt”‑style structure); other times, the token only tracks price or economics without conferring shareholder rights, which makes it more like a linked note or a security‑based swap. In both cases, the SEC is clear: these are securities, and in some cases, security‑based swaps, with all associated regulatory obligations.

This framework gives innovators a simple question to answer up front: are you enabling real, legally recognized ownership via tokenization, or creating synthetic exposure that must sit inside both securities and derivatives rules?

What the SEC Actually Cares About

Across both models, the SEC’s priorities are consistent and very operational.

• The format does not change the law. Whether the security is represented on paper, in a traditional database, or as a token on-chain, if it meets the statutory definition of a security, the full federal securities regime applies. Tokenization cannot be used as a workaround to registration, disclosure, or reporting.
• Books and records remain the anchor. Firms must maintain accurate, reconciled books and records that reflect who legally owns what, regardless of whether they operate on-chain, off-chain, or in a hybrid model. The authoritative ledger, not just the blockchain, is what will matter in examinations, audits, and disputes.
• Intermediary controls still apply. Broker‑dealers, advisers, and funds must integrate tokenized securities into existing custody, valuation, liquidity, and trading controls; they are not permitted to run a looser set of standards just because the asset is tokenized.
• Synthetic and third‑party tokens carry elevated scrutiny. Tokens that mirror the economics of another firm’s securities without conveying actual ownership fall into the “linked note/security‑based swap” bucket, raising expectations around counterparty risk, collateral, and derivatives compliance.

This is a blueprint for compliant regulators. If you design your structures to fit known regulatory categories, you can move faster with far less legal uncertainty.

How RedSwan Maps to the New SEC Playbook

Viewed through this lens, RedSwan’s model for tokenized commercial real estate is directionally aligned with the SEC’s issuer‑sponsored framework and operational expectations.

1. Treating Tokens as Securities, Not Loopholes

RedSwan consistently describes its offerings as “digital securities,” “commercial real estate shares,” and “asset‑backed digital securities,” explicitly positioning them under Reg D and Reg CF exemptions rather than as unregulated utility tokens. This language mirrors the SEC’s “same rules, new format” stance and signals to investors that rights and protections are grounded in traditional securities law rather than crypto‑centric narratives.

By anchoring every offering in existing exemptions and emphasizing SEC/FINRA licensing for distribution, RedSwan is clearly leaning into regulation rather than away from it.

2. Issuer‑Sponsored Style Tokenization of Real Estate

RedSwan fractionalizes equity interests in commercial real estate into digital securities that represent real ownership interests in specific deals or entities, rather than synthetic price exposure. That aligns with the issuer‑sponsored model: tokens track genuine equity participation, not merely the economics of a separate underlying.

RedSwan also acts as registrar/transfer agent for its digital securities, maintaining a lifecycle record of ownership changes, which is precisely the type of authoritative ledger the SEC expects to sit behind any on-chain movement. With this structure, token transfers are designed to correspond to actual, enforceable ownership changes, not just cosmetic shifts on a blockchain.

3. Regulated Marketplace, Broker‑Dealer, and ATS Infrastructure

The RedSwan ecosystem includes FINRA‑member broker‑dealers, RedSwan Markets LLC, which is licensed to offer and sell digital CRE securities under Reg D 506(c) and Reg CF. Public materials highlight a full‑stack process: KYC, investor accreditation checks, escrow, deal execution, and post‑trade recording, all run through regulated entities.

This marketplace model is strongly aligned with the SEC’s guidance that tokenized securities must sit inside existing broker‑dealer and trading‑venue frameworks, rather than being pushed into unregulated exchanges.

4. Custody, Record‑Keeping, and Institutional Partnerships

RedSwan’s integration with institutional‑grade partners (including blockchain networks like Stellar and infrastructure and custody partners such as Coinbase) is presented as part of a compliant settlement and record‑keeping stack. Combined with its registrar/transfer‑agent role, this supports the SEC’s core concern: that ownership records be accurate, reconcilable, and auditable across both on-chain and off-chain systems.

Tokenization is about upgrading market infrastructure to provide issuers and investors with speed, transparency, and global access without leaving the securities-law perimeter.

Source: https://bit.ly/SECstatementtokenizedsecurities