SEC Rewrites 50-Year-Old Stock Ownership Rules to Allow Public Blockchain Settlement

## SEC Moves to Put Stock Ownership Records On-Chain The Securities and Exchange Commission has proposed rules that would permit public blockchains to function as legally recognized records of stock ownership, according to reporting published Tuesday. The draft transfer agent rule — which targets infrastructure that has remained largely unchanged since the Securities Exchange Act amendments of the 1970s — has advanced to White House review alongside a separate SEC rewrite of crypto custody requirements. Taken together, the two proposals represent the most aggressive attempt by a U.S. financial regulator to integrate public blockchain infrastructure into core securities market plumbing. ## What the Proposals Actually Say The transfer agent proposal would update rules governing how ownership of publicly traded shares is recorded and transferred. Under the current system, a network of custodians, clearing firms, and the Depository Trust and Clearing Corporation (DTCC) intermediate virtually every stock transaction. The SEC's draft would create a pathway for blockchain-based records to satisfy legal ownership requirements — meaning a wallet address, under the right framework, could constitute proof of share ownership. The crypto custody rewrite, now at the Office of Information and Regulatory Affairs (OIRA) for White House review, targets the rules governing how registered investment advisers hold digital assets on behalf of clients. The original Staff Accounting Bulletin 121 framework — which required banks to hold crypto as a liability on their balance sheets — drew sustained industry criticism for making institutional custody economically unworkable. The rewrite is expected to relax those constraints. Separately, Grayscale has gone public with its own pressure campaign, urging the SEC not to dismantle the current ETF approval framework. In a statement directed at the regulator, Grayscale's message was blunt: "Don't break what works." The firm's concern centers on proposed rule changes that could impose novel requirements on crypto ETFs that don't apply to traditional fund structures. Crypto industry groups have pushed the SEC to create tailored rules for what they describe as "novel ETFs" — products that hold assets or use structures that don't map cleanly onto existing 1940 Act frameworks. ## The Scale of What's Being Proposed Rewriting transfer agent rules is not a marginal adjustment. The DTCC and its subsidiaries process transactions representing tens of trillions of dollars in securities annually. Inserting a public blockchain into that chain of custody — even optionally — would require broker-dealers, custodians, and clearinghouses to interact with on-chain infrastructure in ways most are not currently equipped to handle. For crypto-native traders, the immediate implication is less about Bitcoin price action and more about the legitimacy infrastructure being built around tokenized securities. Projects like Ondo Finance, which has already petitioned the SEC and CFTC to bring U.S. stock perpetuals onshore, stand to benefit directly if the regulatory framework catches up to what the on-chain markets are already doing. Wyoming, meanwhile, moved this week to integrate Chainlink's proof-of-reserve verification into its state-issued stable token — a smaller-scale but concrete example of public blockchain infrastructure being formalized into government-issued financial instruments. ## What Traders Should Watch The White House review process at OIRA typically runs 90 days, though it can extend. Once that review concludes, the SEC can publish a final rule or send it back for revision. Key pressure points to monitor: - **Comment period outcomes**: Industry opposition from legacy custodians and clearinghouses could slow or dilute the transfer agent rule. - **Custody rule finalization**: If the crypto custody rewrite clears OIRA intact, it removes one of the most significant structural barriers to bank-grade institutional custody of digital assets. - **ETF rule interaction**: How the SEC reconciles Grayscale's objections with the novel ETF framework will directly affect the product pipeline for multi-asset and leveraged crypto ETFs. - **Tokenized securities plays**: Protocols and platforms positioned to issue or settle blockchain-based equities — Ondo, Securitize, and similar infrastructure layers — are the direct beneficiaries if these rules advance. The SEC under its current leadership has moved faster on crypto-adjacent rulemaking than any prior administration. That speed creates opportunity, but also the risk that rules finalized quickly contain ambiguities that get litigated for years. Traders pricing in a smooth on-chain securities future should keep that execution risk in the model.