The U.S. Securities and Exchange Commission has proposed its first major update to transfer-agent rules since the late 1970s, bringing blockchain-based securities record-keeping into a regulatory framework built for electronic ownership data.
The proposal, announced Sept. 1, acknowledges that transfer agents may use blockchain technology in securities offerings and share transfers. It does not amount to a blanket endorsement of tokenization. Instead, it recognizes that distributed ledgers may play a role in maintaining records of securities ownership while keeping transfer agents at the center of the system.
The issue matters because tokenized securities can be represented in several different places at once: a token wrapper, a special-purpose vehicle, a broker’s internal ledger and a transfer agent’s off-chain database. If those records diverge, determining who legally owns an asset could become difficult, particularly as trading volumes and the number of tokenized products grow.
Why transfer agents matter
Transfer agents maintain the official register of security holders. Their responsibilities include recording ownership, processing transfers, handling restrictive legends and working within the national clearance and settlement infrastructure alongside the Depository Trust & Clearing Corporation, or DTCC.
In practical terms, the transfer agent is the link between a security and the record that establishes who owns it. A blockchain can make transfers more continuous and settlement more rapid, but those benefits do not automatically make a token the underlying equity or other security.
CoinDesk published the argument from Joris Delanoue of Fairmint, a company that registered as a transfer agent in 2023. Delanoue said the central question is whether a token held in a wallet is part of the official ledger required under Section 17A of the Exchange Act, rather than merely a digital representation connected to a separate off-chain record.
Fairmint’s stated model is to issue, administer and transfer equity directly onchain, with the capitalization table serving as the system of record. That differs from placing a token over an existing security and relying on multiple systems to remain synchronized.
Lessons from the Paperwork Crisis
The debate recalls the late-1960s “Paperwork Crisis,” when a surge in stock-trading activity overwhelmed the manual processes used to clear and process transactions. The backlog became severe enough that the New York Stock Exchange closed on Wednesdays for six months while back offices worked through it.
A further problem was the absence of one authoritative ownership list. The industry eventually moved away from decentralized physical certificate tracking and toward centralized electronic recordkeeping. The Depository Trust Company, formed in 1973, immobilized physical certificates in a central vault and enabled ownership changes through electronic bookkeeping. That arrangement remains part of the infrastructure supporting modern markets.
The concern raised by Fairmint is that tokenization could reproduce the underlying record-keeping problem in digital form if different intermediaries maintain separate versions of ownership. A blockchain may be public and continuously updated, but that does not by itself determine which record has legal authority or how wallet addresses correspond to identifiable owners.
The SEC proposal does not create a separate “crypto transfer agent” category or place tokenized shares in a distinct regulatory sandbox. Keeping distributed-ledger activity within the existing Section 17A framework could avoid creating two markets: one for conventional securities and another for tokenized instruments with different ownership standards.
Operational questions for the new framework
Fairmint’s recommendations focus on how the rules would work in practice:
- Form TA-2 reporting should distinguish native onchain registers from models that wrap securities held elsewhere.
- Holder-identification rules should permit tools such as cryptographic credentials, digital IDs and wallets, rather than relying exclusively on physical street addresses.
- Proposed requirements covering legend removal and reasonable compliance policies should account for smart contracts that enforce restrictions before a trade takes place.
These suggestions do not remove the role of a regulated intermediary. Even if a public blockchain serves as the official record, a wallet address is not automatically the same as an identified legal owner. A transfer agent would still be needed to connect onchain assets with owners and to apply compliance requirements.
The broader question is how the SEC will define control of a distributed ledger and how the proposed reporting and operational rules will treat different tokenization models. The source column argues that the market should develop a common, open standard for ownership data rather than layering paper-era reconciliation processes onto a blockchain.
Moneyiar market picture
Moneyiar market data at 09:03-09:04 on Oct. 1, 2026, showed mixed performance among the listed digital assets:
- Cronos (CRO): $0.0687811466, up 2.67% over 24 hours and 12.29% over seven days.
- Lighter (LIT): $3.9819945437, up 4.78% over 24 hours but down 25.2% over seven days.
- ApeCoin (APE): $0.1505214609, down 1% over 24 hours and up 0.98% over seven days.
- Tagger (TAG): $0.0008599803, up 0.91% over 24 hours and 1.53% over seven days.
These prices describe market performance and do not indicate how the SEC’s transfer-agent proposal will develop.
