The Tokenization Shift Has Gone Mainstream And Compliance Can’t Afford To Sit Out
Tokenization, the process of issuing traditional financial assets such as equities, funds, or real estate on blockchain infrastructure, has quietly moved from theoretical to inevitable. What’s changed is not the technology but the tone of global regulators and institutions.
The conversation has shifted from IF to HOW SOON…
A Wave of Global Regulatory Normalization
In the United States, momentum is building. The Securities and Exchange Commission (SEC) Commissioner Hester Peirce has made it clear: “Tokenized securities are still securities.” Her message is straightforward – firms should not expect lighter rules, but rather modernized enforcement.
Commissioner Mark Uyeda has gone further, stating that tokenization impacts every layer of market structure, including issuance, trading, settlement, and record-keeping. He has called for a “clear, predictable framework” instead of leaving the industry in uncertainty.
At DC Fintech Week, SEC Chair Paul Atkins reinforced that direction. According to multiple reports, Atkins emphasized that tokenization is now a top priority. He warned that the U.S. risks falling behind global peers and urged the SEC to work with responsible financial institutions building tokenized infrastructure. The takeaway is unmistakable: regulatory momentum is here.
Meanwhile, the U.K. and EU Are Moving Faster
Across the Atlantic, regulators are not waiting. The U.K.’s Financial Conduct Authority (FCA) is actively enabling institutional tokenization by approving tokenized funds on public blockchains and exploring stablecoin-based settlement rails. These moves position London as a leader in the modernization of asset management.
In the European Union, the Markets in Crypto Assets (MiCA) framework removes ambiguity entirely. Market abuse and conduct rules apply fully to tokenized assets, just as they do to traditional securities. For the EU the shift is not theoretical; it is operational.
Institutions Are Fully Awake
When Larry Fink, CEO of BlackRock, declares, “We’re at the beginning of the tokenization of all financial assets,” the industry pays attention. This is not a crypto experiment; it is institutional finance evolving.
Venture capital leaders are echoing that vision. Andreessen Horowitz (a16z) is calling for a technology-neutral standard where the same rules apply, regardless of whether assets trade on legacy systems or blockchain rails. When Wall Street and Silicon Valley align, change accelerates—and compliance must keep up.
The Compliance Gap No One Is Talking About
Despite this global acceleration, compliance technology has not caught up. Employee personal account dealing (PAD) systems were built for the pre-token era, monitoring trades executed through traditional brokers.
Within the next 12 to 18 months, monitored employees will be able to trade tokenized equity, funds, real estate, credit, and private market assets on centralized venues or directly on-chain. Most PAD systems cannot see these transactions, leaving blind spots in oversight.
Regulators, meanwhile, are increasingly explicit. If a tokenized asset functions as a security, it will be supervised as one. The compliance gap is widening and ignoring it will not make it go away.
The principle remains simple: the rules do not change, but the rails do. Firms that adapt early will define the standards others are forced to follow.
Preparing Compliance for the Tokenization Era
StarCompliance (Star), the only platform that automates the entire compliance process—from pre-trade clearance to post-trade surveillance—helps firms close the gap with employee compliance controls purpose-built for the tokenized future. These capabilities include:
- Broker and blockchain monitoring for both custodial and self-custody wallets
- Pre-clearance and restricted lists tied to smart contract addresses; tokenized equities, funds, and real-world assets; and ticker symbols
- Uncover potential risks and receive automated alerts on potential front-running and insider trading behaviors through our proprietary algorithms combined with best-in-class news sources.
- Product configuration to comply with SEC, UK MAR, EU MAR, MiCA, MAS, SFC, and VARA frameworks
A Call to Action
If your employee trading oversight cannot see tokenization, it is already behind. The market, regulators, and institutions have moved. Compliance must follow.
Connect with Star today to future-proof your crypto PAD and MNPI controls —and ensure your firm is ready for the next era of financial markets. Schedule your personalized demo here.
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