- Hester Peirce, the head of the SEC’s crypto taskforce, has warned market participants that tokenisation doesn’t magically change the security status of the underlying assets.
- Peirce reminded issuers they must ensure they’re adhering to securities laws and encouraged issuers to consider meeting with the SEC to clarify their legal obligations.
- Her statement came amid rapid growth in the tokenisation of real world assets, with a recent report finding there is now over US$24 billion in tokenised assets.
Hester Peirce (aka Crypto Mom), may have triggered flashbacks in some degens yesterday as she channelled Gary Gensler in issuing a warning to market participants to comply with securities laws.
The head of the US Securities and Exchange Commission’s (SEC’s) crypto taskforce issued the caution in her July 9 statement entitled “Enchanting, but Not Magical: A Statement on the Tokenization of Securities.” Peirce said that simply tokenising securities doesn’t magically transform the underlying assets into non-securities or render them exempt from securities laws.
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. Accordingly, market participants must consider—and adhere to—the federal securities laws when transacting in these instruments.
Sounding eerily similar to the much-maligned former SEC Chair, Peirce also encouraged issuers of tokenised products to “consider meeting with the Commission and its staff”.
Peirce warned purchasers of tokenised securities to ensure they understand who exactly is issuing the tokenised products and what exactly is being tokenised. She noted that some tokenised securities may expose investors to unique risks, including counterparty risk:
An unaffiliated third party with custody of securities issued by another entity might, for instance, issue a new tokenized security tied to the securities it holds or may tokenize the “security entitlements” that investors hold against the custodian. Purchasers of these third-party tokens may face unique risks, such as counterparty risks.
Hester Peirce, SECPeirce also reminded issuers that some types of securities may not be able to be legally traded by retail investors at all in certain circumstances — tokenised or not — giving the example of security-based swaps.
“A token that does not provide the holder with legal and beneficial ownership of the underlying security could be a ‘security-based swap’ that cannot be traded off exchange by retail persons.”
Related: SEC Commissioner Hester Peirce Tells Crypto Investors to ‘Be an Adult’, Clarifies Securities Transactions
Tokenisation Set to Boom, According to Report
The reminder from Peirce to adhere to relevant securities laws comes amid rapid growth in real-world asset tokenisation.
A report released last month by web3 platforms Redstone, Gauntlet and RWA.xyz found that real-world asset tokenisation had reached US$24 billion (AU$36.6b) in size by June 2025, an increase of 380% in three years.
Related: SIFMA Calls on SEC to Shut Door on Tokenised Equities Without Public Review
The report also forecast a potential tokenisation explosion, finding the combined market cap of tokenised assets could be as much as US$30 trillion (AU$45.8t) by 2034.
“Industry projections suggest 10-30% of global assets could be tokenized by 2030-2034, positioning RWAs are bridging traditional finance’s $400+ trillion in assets to blockchain – over 130x larger than crypto’s current ~$3 trillion market cap,” the Redstone report said.
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