Blockchain, Tokenization and Private Placements:
What Issuers and Sponsors Need to Know

I recently participated on a panel at the North Capital Partner Summit titled The Regulatory Reset: GENIUS, CLARITY, and an SEC That Wants You Public.

A big thanks to North Capital for organizing this enlightening program and inviting me to participate. North Capital is a supportive colleague and worthy competitor and a firm that I really respect. Its professionals, including Jim Dowd and Sara Judd, regularly engage with many of the same regulatory issues that concern us at TOBIN.  This makes us amicable travelers down the same winding road.

Blockchain and tokenization were prominent throughout the Summit, as well as for our panel conversation.

The attorneys on our panel started things off and approached the subject from the top down: what Congress and the regulators are building and the opportunities those changes may create. My role was different. I kept coming back to what this means to the broker-dealers actually implementing the rules.  I referred to us as the “boots on the ground,” the broker dealers actually empowering issuers and sponsors as they bring tokenized private placements to market.

TOBIN has now brought two tokenized private offerings to market, so this is not academic for us. We are actively gaining experience and developing a practical framework for how blockchain fits within the existing private-placement framework through real transactions.

TOBIN is a leader in figuring out how existing rules apply to new structures. On the panel, I compared the broker-dealer’s role to being in the trenches on the European front in World War I: trying to do our jobs while ducking for cover and taking the pot shots regulators are renowned for taking. That is not an objection to regulation. It is the practical difficulty of moving into new territory while regulators themselves are still deciding how the rules apply.  This is a very real depiction of what it means to open new markets in the securities industry. 

Blockchain is no longer sitting outside the traditional securities markets waiting for regulators to decide what to do with it. The SEC is now actively contemplating how tokenized securities, on-chain trading, crypto custody and blockchain-based capital formation fit inside the regulated financial system.  And broker dealers like TOBIN are actively bringing these offerings to market.

GENIUS, CLARITY and the Move On-Chain

The GENIUS Act became law in July 2025, establishing a federal regulatory framework for payment stablecoins. The CLARITY Act, which would establish a broader market-structure framework for digital assets, passed the House but failed to advance in the Senate in September 2026.

Because of that failure, the SEC took action. 

Two days after the Senate vote, SEC Chairman Paul Atkins announced an Innovation Exemption permitting limited trading of tokenized publicly traded stocks through certain on-chain Tokenized Securities Venues. Atkins described the exemption as “a bridge toward more durable rulemaking.”

The Commission had already proposed Regulation Crypto Assets, which would create a tailored federal securities offering framework for certain investment contracts involving crypto assets. The proposal includes new capital-raising exemptions and a conditional safe harbor from investment-contract status under specified circumstances.

And just this month, the SEC proposed new rules addressing how registered investment advisers and regulated funds may custody crypto assets.

Atkins’s description of that proposal was telling. The Commission is attempting to replace regulatory uncertainty with a compliant pathway for an asset class its existing custody rules were never designed to accommodate.

The technology changes. The old rules do not quite fit. Rather than pretending they do, the regulator writes a pathway.  I like that approach.  This is the way things SHOULD work.

Applying Existing Rules to a New Infrastructure

To help our sponsors and issuers get on-chain, broker-dealers like TOBIN have to figure out how to apply established broker-dealer obligations to this new environment and these new vehicles.  In the new world of blockchain, securities are being issued, recorded or transferred through technology that the historical rules were not written to contemplate.

Managing broker-dealers know what we are required to do in a private placement offerings. What is less clear is how those obligations translate when blockchain infrastructure, tokenization vendors, digital wallets and new methods of recording ownership are layered onto the transaction. Regulators have begun addressing pieces of that framework, but broker dealers bringing these securities to market are still having to make many of those judgments without much practical guidance from the regulators who may later examine those decisions.

In bringing two tokenized private offerings to market, TOBIN first had to do the work we would do for any private placement: analyze the applicable exemption from registration, confirm and sign off on investor disclosures and qualification requirements, conduct extensive due diligence, review and approve communications, establish supervisory procedures and address books and records requirements.

Then we have another layer of responsibility.

We must understand exactly what is being placed on the blockchain, what legal rights the token represents and how those rights relate to the issuer’s traditional books and records. We also must review the agreements made with the tokenization vendors, understand their respective roles and responsibilities and determine how the security would move from the issuer’s conventional ownership records onto the blockchain without changing the underlying legal rights of the investor.

The traditional securities analysis remains intact. Tokenization introduces a separate layer of legal, operational and vendor diligence that the broker-dealer must understand and document because regulators and litigators will eventually examine those decisions.

Tokenization may change how an ownership interest is recorded, transferred or traded. It may improve settlement, recordkeeping and portability and may eventually increase liquidity in markets that have historically been illiquid.

The technology may be new, but the broker-dealer’s obligations are not. The challenge is determining and documenting how those obligations are satisfied when the regulatory framework has not yet caught up with the infrastructure.

The Bottom Line

Tokenization is no longer theoretical for private-market issuers.

For issuers and sponsors considering this structure, the important point is that tokenization does not replace the traditional private-placement process. It sits on top of it. The offering still requires the same securities analysis, disclosure, diligence, communications review, investor qualification and supervision. The blockchain infrastructure then introduces another layer involving the token itself, ownership records, transfer mechanics, wallets, vendor responsibilities and the agreements governing all of them.

That means the broker-dealer needs to understand the tokenization structure early in the process, not after the technology and vendor relationships have already been established.

There is real promise here. Tokenization can improve recordkeeping, portability and settlement and may ultimately create greater liquidity for traditionally illiquid securities. But issuers should expect their broker-dealer to ask more questions, review more documents and spend more time understanding how the technology interacts with the security being offered.

That is not resistance to innovation. It is what bringing innovation into the regulated securities markets actually requires.

At TOBIN, we are enthusiastic about where this market is going. We are also approaching it the same way we approach every private placement: understand the structure, understand the parties, understand the risks and document the process and results.