- Coinbase is urging the SEC to permit both issuer and third-party tokenization of publicly traded securities.
- The exchange argues that requiring issuer consent for third-party tokenization would conflict with established U.S. securities law and restrict secondary-market portability.
Coinbase is pushing back against a key SEC position on tokenized securities, arguing that public-company issuers should not have the power to block third parties from creating blockchain-based versions of their stock.
The exchange, in written input to the regulator, said both issuer-led tokenization and third-party tokenization should be permitted. Its main objection is fairly straightforward.
If the SEC were to require third parties to obtain issuer consent before tokenizing publicly traded securities, Coinbase says that would cut against long-standing principles in U.S. securities law and make capital markets less open, not more.
Coinbase targets issuer-consent model
The dispute goes to the heart of how tokenized securities might develop in the U.S. market. One path would give listed companies effective control over whether their shares can circulate in tokenized form on blockchain rails. The other would allow outside firms to build tokenized representations without first securing permission from the issuer.
Coinbase is clearly siding with the second model, or at least with a system where both models can coexist. In its view, forcing issuer approval would hand traditional gatekeepers too much control over how securities move in secondary markets.
That argument is not just about crypto infrastructure. It is also about market structure. Coinbase says issuer-imposed restrictions on secondary portability run against decades of SEC precedent, which has generally resisted allowing companies to dictate how securities are transferred after issuance.
Tokenization debate moves into old legal territory
That point matters because tokenization is often presented as a technology story, when much of the real fight is legal and institutional. The question is not only whether shares can be put onchain. It is who gets to decide, and whether blockchain-based portability should be treated as an extension of existing secondary-market rights or as something issuers can selectively approve.
Coinbase’s submission suggests the company sees the SEC drifting toward a more restrictive approach, one that could narrow tokenization into a permissioned model dominated by incumbent issuers. The exchange argues that such a framework would slow experimentation and reduce the broader efficiency gains tokenized markets are meant to bring.
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