DeFi Lend is committed to full compliance with SEC guidance on tokenized securities. We maintain transparent disclosure practices and adherence to all applicable federal and state securities laws.
Issued by the Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets on January 28, 2026
Read Full SEC StatementThe SEC clarified three models for tokenizing securities and confirmed that federal securities laws apply regardless of format
Securities tokenized directly by the issuer through DLT integration into the master securityholder file. Format does not change securities law application.
Third parties create security entitlements formatted as crypto assets. Underlying securities held in custody. Holders have indirect interest via security entitlement.
Linked securities or security-based swaps providing synthetic exposure. Not obligations of original issuer. May require registration unless sold to eligible contract participants.
Core regulatory principles that guide our compliance approach
Whether a security is onchain or offchain does not affect the application of federal securities laws.
Every offer and sale must be registered unless an exemption applies, regardless of tokenized format.
Classification depends on economic reality rather than the name given to the instrument.
If tokenized securities have substantially similar rights as traditional format, they may be considered the same class.
How DeFi Lend implements SEC guidance in practice
DeFi Lend operates as a third-party tokenizer for equity securities (xStocks). We create tokenized security entitlements representing indirect interests in underlying securities held in custody.
All tokenized securities offered through DeFi Lend comply with the Securities Act of 1933, Securities Exchange Act of 1934, and Investment Company Act of 1940.
We provide comprehensive risk disclosures for all tokenized securities, ensuring investors understand the unique risks of third-party tokenization.
Underlying securities are held with qualified custodians meeting institutional standards for security, insurance, and regulatory compliance.
All investors must understand these risks before purchasing tokenized securities
Holders of tokenized equities (xStocks) are exposed to the bankruptcy or insolvency risk of the custodian holding the underlying securities. If the custodian fails, token holders may lose access to the underlying assets.
xStock tokens do NOT convey voting rights, dividend rights, or other direct shareholder benefits unless explicitly stated in the token terms. Token holders have an indirect interest via security entitlement, not direct legal ownership.
Tokenized securities are subject to evolving regulatory frameworks. Changes in laws or regulations may affect the value, transferability, or legal status of tokenized securities. Token holders may face unique legal risks not present with traditional securities.
We're committed to transparency and regulatory compliance
Division of Corporation Finance:
Use Corporation Finance Request Form for interpretive advice
Division of Trading and Markets:
(202) 551-5777 or [email protected]
For questions about our compliance practices, custody arrangements, or risk disclosures:
Email: [email protected]
Legal: [email protected]
Disclaimer: This page provides general information about our regulatory compliance approach and is not legal advice. Investors should consult with their own legal and financial advisors before making investment decisions. The SEC Staff Statement on Tokenized Securities has no legal force or effect and does not alter or amend applicable law.