Coinbase Challenges SEC on Issuer Consent for Tokenized Securities
- Coinbase opposes the SEC’s requirement for issuer approval in third-party tokenization of publicly traded securities.
- The SEC classifies tokenized securities into issuer-sponsored and third-party sponsored categories, citing secondary-market portability risks.
- Scott Bauguess from Coinbase stated that third-party tokenization does not create new securities and maintains shareholder rights.
- The SEC plans to introduce a tokenization innovation exemption framework to facilitate trading without full registration.
- Recent SEC actions include Nasdaq’s approval for trading tokenized securities and a pilot program by DTCC for Tokenization Services.
With increasing interest from traditional finance (TradFi) institutions in tokenization, Coinbase argues that requiring issuer consent could hinder innovation and push developments offshore. The upcoming SEC framework aims to support this growing demand while addressing regulatory concerns.
Coinbase’s stance highlights potential conflicts with established U.S. securities law, as it claims that issuer consent requirements could limit the effectiveness of the forthcoming innovation exemption framework.(Source)
