The U.S. Securities and Exchange Commission is keeping a close eye on stock tokens and may bring more cases against companies that issue them, SEC Chairman told the virtual attendees of the American Bar Association’s mid-year program.
SEC Chairman Gary Gensler
“I’d briefly like to discuss the intersection of security-based swaps and financial technology, including with respect to crypto assets. There are initiatives by a number of platforms to offer crypto tokens or other products that are priced off of the value of securities and operate like derivatives,” Gary Gensler says.
“Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime,” he added.
“We’ve brought some cases involving retail offerings of security-based swaps; unfortunately, there may be more,” the SEC chairman said.
Stock tokens are tokens that closely track the performance of traditional financial securities, particularly shares of publicly traded companies. Stock tokens are delta-one products that are backed by physical shares. This means for a given instantaneous move in the price of the underlying asset there is expected to be an identical move in the price of the derivative.
As AZCoin News reported on July 16, Binance will be winding down support for stock tokens on Binance.com to shift its commercial focus to other product offerings, the exchange will no longer support any stock tokens after 2021-10-14 19:55 (UTC).