Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
SEC Exploring Ethereum Standard for Tokenized Securities
Tokenization | July 21, 2025
Image: Freepik
SEC Meets Ethereum Groups on Tokenized Securities Standards
On July 16, 2025, the U.S. Securities and Exchange Commission (SEC) held a private meeting with Ethereum-linked groups including ERC-3643 Association and Chainlink Labs to explore standards for compliant tokenized securities. At the same time, SEC Chair Paul Atkins confirmed that the agency is reviewing an innovation exemption that could allow programmable compliance frameworks to operate with targeted regulatory relief. It's a new development that confirms growing regulatory support for tokenized finance, further raising the bar for Canadian policymakers to respond.
Key Developments
- SEC meets with Ethereum-based organizations
- Programmable compliance and tokenized securities standard
- GENIUS Act signed into U.S. law, and SEC exploring innovation exemption
- Implications for Canadian fintech regulation
1. SEC Engages Ethereum Ecosystem About Compliant Tokenization
In a major development during Crypto Week, the SEC held a private session with Ethereum-aligned groups, such as the ERC‑3643 Association, Chainlink Labs, the Enterprise Ethereum Alliance, Etherealize, and LF Decentralized Trust to explore the use of public blockchain infrastructure for regulated securities.
See: Peirce: You Can Tokenize Securities but Not Skip the Rules
The meeting focused on how blockchain systems can follow existing rules for verifying identities, tracking ownership, and controlling who can buy or sell tokenized securities. The groups shared technical solutions that help meet these requirements while still using decentralized public blockchains.
Dennis O’Connell, president of the ERC‑3643 Association said the SEC showed a “noticeable shift in tone” and openness to openly source industry standards.
2. Programmable Compliance: ERC‑3643 and Chainlink ACE
Two frameworks were at the center of the meeting:
- ERC‑3643 — An Ethereum token standard designed to support compliant transfers of tokenized securities by embedding identity verification, issuer registry, and onchain control mechanisms
- Chainlink Automated Compliance Engine (ACE) — allows for smart contract-based enforcement of regulatory rules across jurisdictions. It integrates existing ID systems with onchain logic and supports public and permissioned chains
See: Robinhood Tokenizes Stocks and Launches Blockchain
Chainlink Labs in a statement:
“Only Chainlink provides the compliance, privacy, cross-chain, and data infrastructure needed to scale digital asset adoption in a single platform.”
In partnership with the Blockchain Association, Chainlink recently launched Tokenized in America, a national ranking of blockchain leadership across all 50 U.S. states.
3. Policy Momentum as GENIUS Act Becomes Law
The SEC meeting coincided with Crypto Week where rapid legislative developments were taking place in Washington. The GENIUS Act was signed into law, establishing a federal framework for stablecoin regulation, and recognizing the role of tokenized payment infrastructure. It was passed alongside the CLARITY Act, which defines treatment for digital assets, and the Anti-CBDC Surveillance State Act.
SEC Chair Paul Atkins spoke publicly about the Commission’s interest in creating an “innovation exemption” that would allow compliant tokenized securities to be piloted without full adherence to legacy rules, saying:
“If it can be tokenized, it will be tokenized.”
See: Is TikTok Going Blockchain? Impact on Creator Economy
Sergey Nazarov, Chainlink co-founder:
Excited to see our industry reaching new heights and getting global adoption from governments because of the fundamental value that our technology provides.
The GENIUS Act is a huge step forward for stablecoins, forming the basis of on-chain payments for retail users in both… https://t.co/QlgtUgOHlu
— Sergey Nazarov (@SergeyNazarov) July 18, 2025
4. What this means for Canada
Canada is already evaluating stablecoins under its existing regulatory framework. The CSA classifies fiat-backed coins like USDC as “Value‑Referenced Crypto Assets” and recently allowed more time for issuers to comply. At the same time, OSFI, Department of Finance and the Bank of Canada are developing new federal rules to license stablecoin issuers to include reserve requirements, redemption, audits, and consumer protection.
See: Fintech Grows 3x Faster, 97% of Market Still Untapped
However, Canada currently lacks equivalent legal tools for programmable compliance mechanisms like ERC‑3643 or Chainlink ACE. If the SEC approves a standards-based tokenization model, Canadian fintechs will face increasing cross-border friction unless policymakers adapt quickly. NCFA previously highlighted this policy gap in its advocacy post, such as Coinbase Pushes for Tokenized Equities Approval commentary. Canadian regulators cannot fall further behind.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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