STA Writes to SEC: Supports Issuer-Sponsored On-Chain Stocks, Opposes Third-Party Synthetic Tokens

The Securities Transfer Association (STA), a U.S. industry organization for securities registration, has written to the SEC, recommending that when formulating rules for on-chain securities, priority should be given to "issuer-sponsored" on-chain stocks that are authorized by the issuing company and recorded in the official shareholder register. The STA opposes synthetic or custodial tokens issued by third-party platforms. The STA points out that "wrapper" tokens issued without the authorization of the issuer can blur shareholder rights and increase the risks of platform credit, custody, and operations faced by investors. The STA suggests that any innovative exemptions, pilot programs, or long-term frameworks should only apply to the issuer-sponsored model and that third-party products must obtain the issuer's consent, while also strengthening information disclosure and compliance. The letter also calls on the SEC to encourage the DTCC and registration agencies to upgrade the Direct Registration System to meet the higher efficiency needs for the transfer and settlement of on-chain securities.

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