SEC Proposes On-Chain Stock Records, Trader Fined $90K for Deleted Messages

The US Securities and Exchange Commission (SEC) has proposed new transfer agent rules that could see stock records move on-chain. This change would require blockchain technology to become an official record of who owns a share, effectively allowing tokens to be treated as shares.

The proposal, which was over a decade in the making, amends existing rules and forms while rescinding one rule and adding several new ones. According to SEC Commissioner Hester Peirce, the update would 'streamline and modernize' the Commission's rules to reflect transfer agents' current processes and operations, including the use of electronic communications and blockchain technology.

Transfer agents sit behind every public company share, keeping the master securityholder file, which is the issuer's legal list of who owns what. They also route dividends and process transfers. The SEC's proposal would require registrars to disclose which securities they tokenize and which networks host them.

In a separate case, the Commodity Futures Trading Commission (CFTC) settled with a swaps trader who had deleted messages regulators ordered him to keep. John Patrick Gorman III was fined $90,000 and permanently barred from repeating the conduct, highlighting the importance of maintaining accurate records in financial dealings.