SEC Exemption Sparks Debate Over Tokenized Stock Structure

The SEC's exemption for tokenized equities has raised questions about whether tokenized stocks should be synthetic instruments or direct claims on underlying shares.

Lawyers and builders are shaping this answer, with some arguing that synthetic tokens are more feasible in the short term, while others believe direct claims will ultimately prevail.

Rodrigo Seira, a partner at Cooley, explained that the exemption allows for tokenized equities, but also laid out where the legal lines still sit. Gabriel Otte, co-founder of Dinari, and Peter Curley, head of global regulatory affairs at Ondo Finance, discussed how each model handles custody, investor rights, compliance, and access for non-U.S. users.

The exemption has reopened the debate on which structure is better placed to scale now that the rules have changed. The discussion centered around the feasibility and advantages of synthetic tokens versus direct claims, with some experts suggesting that synthetic tokens may be more viable in the short term but less desirable for long-term growth.