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Normal stocks exist in a similar way for 99% of people. You don't own them directly you're the 'beneficial owner' and your ownership is just a database entry in

by rtkwe 1y ago

Normal stocks exist in a similar way for 99% of people. You don't own them directly you're the 'beneficial owner' and your ownership is just a database entry in your broker's database backed up contractually. It's the legal hack that lets you just press buy or sell and have it happen almost instantly instead of taking days to move around the paper stock certificates from one vault to another. Even if you go through the trouble of direct registration it's still basically a database entry.

toomuchtodo 1y ago
I can go to FINRA and the SEC if someone does not deliver or properly custodian my security. Who do I go to when the blockchain doesn't? The value is not in the technical implementation, the value is in the trust and legal framework around ownership and counterparty transactions. (paper stock certificates are no longer a thing except in rare circumstances, digitization took place long ago ["dematerialization"] at the clearinghouse)
- toenail 1y ago
  > I can go to FINRA and the SEC if someone does not deliver or properly custodian my security. Who do I go to when the blockchain doesn't? You can go to FINRA and the SEC.
  - toomuchtodo 1y ago
    Ahh, I was unaware FINRA and the SEC had the ability to reverse and override digital asset transactions on public cryptoasset networks. My apologies.
    - toenail 1y ago
      The article is not about blockchain tokens that are securities themselves, hence "tokenization".
      - toomuchtodo 1y ago
        From the article. > The basic idea behind tokenization: Use blockchain technology that powers cryptocurrencies to create digital tokens as stand-ins for things like bonds, real estate or even fractional ownership of a piece of art and that can be traded like crypto by virtually anyone, anywhere at any time. > However, the SEC has struck a cautionary tone when it comes to tokens. Shortly after Robinhood’s announcement, SEC Commissioner Hester Peirce, who has been an outspoken crypto supporter, issued a statement saying companies issuing tokenized stock should consider “their disclosure obligations” under federal law. > “As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset,” Peirce said. https://www.sec.gov/newsroom/speeches-statements/peirce-statement-tokenized-securities-070925 https://www.sec.gov/newsroom/speeches-statements/peirce-stat... > The SEC’s 2025 rules say crypto tokens are likely securities if they act like investment contracts. This means tokens sold with promises of profits, driven by a central team’s efforts, will be categorized as securities. The SEC’s 2025 guidance outlines specific scenarios in which crypto tokens will likely be classified as securities. These typically involve projects that are still centrally controlled, promote profit expectations, or offer limited utility at the time of sale. https://cointelegraph.com/explained/secs-2025-guidance-what-tokens-are-and-arent-securities https://cointelegraph.com/explained/secs-2025-guidance-what-... Schrödinger's tokens?
  - lxgr 1y ago
    And show them my private keys proving... what exactly? That I own a derivative, possibly backed by a share, and they should please enforce my property rights in something they have no actual control over or even knowledge of?
- rtkwe 1y ago
  These could be backed by the same SEC and FINRA requirements kind of have to see how the regulation plays out. I'm not super optimistic about it given their current attitudes towards crypto but this does more directly mix with the normal stock market so who knows where the rules will come down on this, they can regulate anyone claiming to offer tokenized securities to hold them purely 1-1 on the stock transfer agent of the companies for example, you don't have to regulate the 'blockchain' as an amorphous concept there will individuals/companies offering these tokens after all.

by rtkwe 1y ago

toomuchtodo 1y ago

I can go to FINRA and the SEC if someone does not deliver or properly custodian my security. Who do I go to when the blockchain doesn't? The value is not in the technical implementation, the value is in the trust and legal framework around ownership and counterparty transactions. (paper stock certificates are no longer a thing except in rare circumstances, digitization took place long ago ["dematerialization"] at the clearinghouse)

toenail 1y ago
> I can go to FINRA and the SEC if someone does not deliver or properly custodian my security. Who do I go to when the blockchain doesn't? You can go to FINRA and the SEC.
- toomuchtodo 1y ago
  Ahh, I was unaware FINRA and the SEC had the ability to reverse and override digital asset transactions on public cryptoasset networks. My apologies.
  - toenail 1y ago
    The article is not about blockchain tokens that are securities themselves, hence "tokenization".
    - toomuchtodo 1y ago
      From the article. > The basic idea behind tokenization: Use blockchain technology that powers cryptocurrencies to create digital tokens as stand-ins for things like bonds, real estate or even fractional ownership of a piece of art and that can be traded like crypto by virtually anyone, anywhere at any time. > However, the SEC has struck a cautionary tone when it comes to tokens. Shortly after Robinhood’s announcement, SEC Commissioner Hester Peirce, who has been an outspoken crypto supporter, issued a statement saying companies issuing tokenized stock should consider “their disclosure obligations” under federal law. > “As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset,” Peirce said. https://www.sec.gov/newsroom/speeches-statements/peirce-statement-tokenized-securities-070925 https://www.sec.gov/newsroom/speeches-statements/peirce-stat... > The SEC’s 2025 rules say crypto tokens are likely securities if they act like investment contracts. This means tokens sold with promises of profits, driven by a central team’s efforts, will be categorized as securities. The SEC’s 2025 guidance outlines specific scenarios in which crypto tokens will likely be classified as securities. These typically involve projects that are still centrally controlled, promote profit expectations, or offer limited utility at the time of sale. https://cointelegraph.com/explained/secs-2025-guidance-what-tokens-are-and-arent-securities https://cointelegraph.com/explained/secs-2025-guidance-what-... Schrödinger's tokens?
- lxgr 1y ago
  And show them my private keys proving... what exactly? That I own a derivative, possibly backed by a share, and they should please enforce my property rights in something they have no actual control over or even knowledge of?
rtkwe 1y ago
These could be backed by the same SEC and FINRA requirements kind of have to see how the regulation plays out. I'm not super optimistic about it given their current attitudes towards crypto but this does more directly mix with the normal stock market so who knows where the rules will come down on this, they can regulate anyone claiming to offer tokenized securities to hold them purely 1-1 on the stock transfer agent of the companies for example, you don't have to regulate the 'blockchain' as an amorphous concept there will individuals/companies offering these tokens after all.