green light for tokenized trading?

Recently, Kraken met with the Crypto Task Force of the SEC to discuss a possible tokenized trading system and seek greater clarity on how to apply securities rules to assets on blockchain.

In this context, we are talking about a technical-legal confrontation that could guide the next regulatory season in the United States, while remaining in the discussion phase regarding specific regulatory changes SEC Crypto Task Force Meetings.

According to the data collected from our monitoring of official sources, including the SEC meetings page, the latest check is updated to August 27, 2025, and there is no direct filing related to Kraken’s submission in the public register.

Industry analysts who follow regulatory dossiers note that many of the technical issues highlighted — particularly those related to on-chain/off-chain reconciliation — are also recurring in European and Asian pilot projects.

What happened: the confrontation with the SEC

According to the official page of the Task Force meetings, representatives of Kraken, accompanied by lawyers from the firm Wilmer Cutler Pickering Hale and Dorr LLP (see also WilmerHale – Studio legale (profilo)), presented a working document that illustrates a model for the negotiation of traditional financial instruments via tokens.

It should be noted that, at the moment, no further details or an official protocol related to the presentation have been made public. For formal updates and materials that may eventually be published, the SEC maintains a dedicated register: SEC – Crypto Task Force: elenco incontri e documentazione.

What the technical proposal contains

The documentation presented describes the architecture and lifecycle of on-chain operations that represent shares of traditional assets (such as stocks, bonds, ETFs) in the form of tokens. An interesting aspect is the combination of distributed ledgers and legacy systems. Key elements include:

• Issuance and records: tokens that represent economic rights on existing instruments, registered on blockchain and synchronized with an official off-chain record.
• Orders and matching: management of the order book and application of transparency rules and best execution, in line with regulated markets.
• Regulation and custody: transfer of ownership and cash settlement carried out through smart contracts, with the intervention of a qualified custodian for the underlying assets.
• Reconciliation: mechanisms to align the on-chain ledger with traditional market infrastructures, such as central securities depository (CSD) and clearing systems.

Why clarity is needed

The critical point concerns the legal classification of tokens that “replicate” existing securities and, specifically, the determination of which licenses or controls should be applied to the platform that trades them.

In this context, the proposal intersects aspects related to supervision, custody, anti-money laundering regulations, and investor protection. It should also be considered how existing obligations will coordinate with automated on-chain processes.

The SEC’s Framework: Same Rules for Same Risks

The position of the SEC, reiterated in various public statements SEC Investor Alerts, is that technology does not change the legal nature of the asset.

In other words, even if the mechanism is tokenized, the asset could remain subject to federal securities laws and jurisprudential tests, such as the well-known Howey test SEC v. W.J. Howey Co., 328 U.S. 293 (1946). In this sense, the principle of “same rules for same risks” remains the interpretative compass.

Points of tension still open

• Supervision of platforms: when an on-chain platform can be classified as a securities exchange or a full-fledged Alternative Trading System (ATS).
• Conflicts of interest: the need to separate the functions of trading, custody, and market making.
• Reconciliation of records: define which record should prevail in case of divergence between the on-chain registration and the legacy system.
• Transparency and disclosure: the informational obligations for issuers and intermediaries of tokens “backed” by assets.

Potential impact on capital raising and market access

Tokenization promises to reduce frictions and open new channels for capital raising, but it also involves risks that require adequate controls.

Among the expected benefits are the fractioning of shares (with potentially lower minimum tickets), more extensive liquidity even during non-traditional hours, and a reduction in operational costs thanks to the automation of settlement and clearing. In this context, it must be said that the quality of protections will be decisive.

• Advantages: fractioning of shares, potentially continuous liquidity, and reduction of operational costs.
• Risks: safeguarding retail investors, market integrity (with risks of manipulation and front-running), adequate AML/KYC procedures, operational resilience, and secure custody of underlying assets.
• Opportunity: access for international investors to exposures on USA securities through solutions compliant with local regulations and new forms of financing for SMEs and private markets.

Examples from the market

In recent years, various operators in non-US jurisdictions have experimented with solutions based on stock tokens and tokenized ETFs, aimed primarily at non-US clients.

The results highlight a growing interest in asset fractionalization and simplification in market access, although there is also a need for transparency and custody rules comparable to those of traditional markets.

For further educational insights, see the dedicated page of Kraken Kraken – Learn/Insights section or our internal insight on asset tokenization Tokenizzazione: practical guide.

Comparison with current law

If a token represents a security, it is likely that it must comply with the same regulations regarding registration, trading, reporting, and transparency applicable to traditional financial instruments.

Tokenization does not in itself entail special treatment: it remains essential to clearly define the responsibility of intermediaries, the quality of information provided to the market, and the safeguards for the custody and segregation of assets.

An interesting aspect is the possible coexistence of on-chain and off-chain ledgers with clear rules on priority and remedies.

What happens now

From the comparison, further interpretative clarifications or guidelines on how to apply existing rules to tokenized trading may emerge. The SEC, as has happened in other contexts, is gathering comments, assessing market risks, and studying whether to intervene through enforcement, guidance, or regulatory proposals.

At the moment, no official timeline for any decisions has been communicated, but formal updates — when available — are published in the dedicated Task Force registers and will be monitored with an update on August 27, 2025.

Quick Glossary

• Custodia: secure storage and administration of assets (or the rights to them) on behalf of clients. See also our practical guide on digital custody.
• Regulation: phase in which the final exchange between asset and cash takes place and ownership is transferred.
• Reconciliation: alignment between the on-chain ledger and traditional accounting or depository systems.

Note: At the moment, a protocol number or a direct link to the filing presented during the meeting is not available in the public register, nor are there official quotes from the SEC or Kraken regarding the meeting. The article will be updated as soon as such materials are published by the parties involved.