Global Watchdogs Urge SEC to Act on Tokenized US Stocks

Written by Aaron S.,

Editor-In-Chief

Last Updated: August 26, 2025

Key Takeaways

ESMA, IOSCO, and WFE asked the US SEC to tighten oversight of tokenized stocks marketed on crypto platforms;
Regulators warned that stock tokens resemble equities but lack the legal rights and safeguards of real shares;
The letter stressed that clear rules are needed before tokenized stocks see wider adoption by major trading platforms.

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A group of international regulators and exchange associations has asked the US Securities and Exchange Commission (SEC) to take a stance on tokenized stocks.

Their concern is that these products copy the look of regular shares but do not come with the same legal rights or investor protections.

Reuters reported on August 26 that the European Securities and Markets Authority (ESMA), the International Organization of Securities Commissions (IOSCO), and the World Federation of Exchanges (WFE) sent a letter to the SEC’s Crypto Task Force.

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According to the letter, they urged closer monitoring of platforms that advertise or sell digital versions of US stocks.

The WFE told Reuters, “We are alarmed at the plethora of brokers and crypto-trading platforms offering or intending to offer so-called tokenized US stocks. These products are marketed as stock tokens or equivalent to the stocks when they are not".

The regulators’ letter asked the SEC to make sure platforms present these products honestly and do not market them as the same as listed shares. They stressed that oversight is needed before tokenized stocks spread more widely.

ESMA is one of the European Union’s main supervisors of financial markets. IOSCO works across countries to set common rules for investor protection. The WFE, based in London, represents stock exchanges and clearing houses worldwide.

The SEC recently received a request from Andreessen Horowitz (a16z) and the DeFi Education Fund (DEF). What did they say? Read the full story.