The SEC Begins Modernizing the Ownership Layer for Blockchain-Native Securities

Regulation Crypto Assets may modernize capital formation for crypto-related investment contracts. The SEC’s September 1 Transfer Agent proposal separately begins modernizing the ownership and recordkeeping layer for a market that expressly includes blockchain-based securities records.

On September 1, 2026, the U.S. Securities and Exchange Commission proposed a major modernization of the federal rules governing registered transfer agents.

The proposal—Release No. 34-106246, File No. S7-2026-30—is intended to reflect the technological environment in which transfer agents now operate, including the widespread use of electronic communications, electronic recordkeeping, uncertificated securities and blockchain technology.

SEC Chairman Paul Atkins explained the proposal’s purpose:

“This proposal would streamline and modernize the Commission’s rules to reflect transfer agents’ current processes and operations, including the use of electronic communications and blockchain technology in connection with securities offerings and the transfer of shares.”

For blockchain-native securities markets, this is an important primary-source regulatory development. The proposal addresses the infrastructure responsible for maintaining the official ownership record and processing the issuance and transfer of securities.

What does a transfer agent do?

A registered transfer agent performs several essential functions throughout the lifecycle of a security. Among other responsibilities, a transfer agent may:

• Maintain the official record of an issuer’s securityholders;
• Record the issuance, cancellation and transfer of securities;
• Update ownership records when securities change hands;
• Help administer corporate actions and distributions;
• Track restrictions affecting the transferability of securities; and
• Support communications between an issuer and its securityholders.

The SEC describes the master securityholder file as the authoritative record of who owns an issuer’s securities. It is intended to correspond to the stockholder ledger or stockholder register recognized under applicable corporate law.

Historically, many of the rules governing these functions were written for an environment dominated by paper certificates, physical records and manual processing. Most of those rules were adopted in the late 1970s and early 1980s and have not been substantively modernized since that time.

The SEC’s new proposal seeks to update that framework for an electronic—and increasingly blockchain-enabled—market.

Express recognition of blockchain recordkeeping

One of the proposal’s most consequential provisions concerns the master securityholder file.

The SEC proposes to require the master securityholder file to be maintained electronically. It could consist of multiple linked files or systems, provided the registered transfer agent maintains exclusive control over the authoritative ownership record.

Most importantly, the proposing release expressly states that a registered transfer agent could use:

The proposal would not require the use of blockchain or endorse one particular technology. Instead, it adopts a technology-neutral principle: the official ownership record must be securely maintained, accurately updated, accessible and controlled by the registered transfer agent, regardless of the underlying technology.

This is an important distinction. Blockchain is not being discussed merely as a digital representation of a separate security held elsewhere. The proposal contemplates that blockchain could form part—or potentially all—of the authoritative record identifying the registered owners of an issuer’s securities.

Connecting on-chain ownership with verified identity

A blockchain address by itself does not necessarily identify the legal owner of a security.

The SEC’s proposal recognizes that a modern transfer-agent system may need to connect:

• On-chain information, such as a wallet address, quantity owned and issue date; with
• Off-chain information, such as the securityholder’s legal name, address and other identifying records.

The Commission specifically requests public comment on systems that associate on-chain records with off-chain securityholder information so that a transfer of a tokenized security results in a corresponding and accurate change in the master securityholder file.

This is a central issue for regulated blockchain-native securities markets. The technological record and the legally recognized ownership record must operate together.

Issuer-sponsored securities versus third-party wrappers

The proposed revisions to Form TA-2 would require registered transfer agents to report tokenized securities according to two different models:

• Issuer-sponsored tokenized securities; and
• Third-party-sponsored tokenized securities.

That distinction is important.

An issuer-sponsored tokenized security is created or authorized with the participation of the issuer and can represent an actual ownership interest or obligation recorded through the issuer’s authorized infrastructure.

A third-party-sponsored token may instead be created by an unaffiliated platform to represent—or provide economic exposure to—a security issued and maintained elsewhere. Depending on its structure, the token may not confer the same ownership rights as the underlying security and may introduce additional counterparty, contractual or bankruptcy risks.

By proposing separate reporting for these models, the SEC recognizes that not all forms of “tokenized securities” are legally or operationally equivalent.

More than technological recognition

The proposal does not simply accommodate blockchain. It would pair technological flexibility with substantially more comprehensive regulatory obligations.

Among other changes, it would:

• Modernize Forms TA-1 and TA-2;
• Update turnaround and processing standards;
• Align posting requirements with the modern settlement cycle;
• Modernize electronic recordkeeping and record-retention requirements;
• Require comprehensive risk-management policies;
• Introduce cybersecurity and operational-risk expectations;
• Require written and annually tested business-continuity plans;
• Require segregation of issuer, securityholder and third-party funds;
• Establish a formal transfer-agent compliance program;
• Expand obligations relating to inactive and lost securityholders; and
• Establish new requirements governing restrictive legends and unregistered securities transactions.

Electronic recordkeeping systems would need controls addressing the integrity, accessibility, reproducibility, redundancy and continuity of records. Transfer agents would also need audit trails capable of tracking access, modification and deletion—including attempted actions, the identity of the relevant user, and the date and time of the activity.

Blockchain technology may help satisfy certain aspects of record integrity and auditability, but its use would not eliminate the transfer agent’s broader obligations concerning securityholder identification, regulatory access, record production, cybersecurity, operational resilience and compliance.

Capital formation and ownership infrastructure

The September 1 proposal should also be viewed alongside the SEC’s proposed Regulation Crypto Assets framework.

The two proposals address different layers of a potential blockchain-native capital market.

Regulation Crypto Assets may create or modernize pathways through which crypto-related investment contracts can be offered, sold, transferred and potentially transition through their regulatory lifecycle.

The Transfer Agent Rule Modernization proposal addresses the ownership and recordkeeping infrastructure supporting securities after—or in connection with—their issuance.

A functioning capital market requires both.

Capital-formation rules determine how an issuer may raise capital and distribute a security. Transfer-agent rules help determine how ownership is officially recorded, how transfers are processed, how restrictions are administered and how the ownership record is protected.

Viewed together, these proposals begin to resemble components of a broader regulatory architecture for blockchain-native capital markets rather than isolated crypto initiatives.

Strategic relevance for Ohanae

The proposal is particularly relevant to Ohanae because its architecture combines regulated broker-dealer infrastructure, an SEC-registered transfer agent and on-chain securities recordkeeping.

Ohanae’s thesis has been that blockchain can support more than digital wrappers representing conventional securities. It can support the underlying market architecture for:

• Capital formation;
• Ownership and recordkeeping;
• Custody;
• Trading and liquidity;
• Clearing;
• Settlement; and
• Securityholder administration.

The SEC’s proposal does not approve any individual company or operating model. Nor does recognition of blockchain recordkeeping automatically authorize trading, custody or settlement activities. Each regulated function remains subject to its applicable legal and regulatory requirements.

Nevertheless, the proposal is meaningful validation of the broader direction of travel. The SEC is expressly designing transfer-agent rules for a technological environment that includes blockchain-based books and records, tokenized securities, wallet-based systems and smart-contract-driven processes.

What happens next?

This remains a proposed rule and may change before adoption.

The public comment period will remain open for 60 days following publication in the Federal Register. Market participants will have an opportunity to address issues such as:

• How a transfer agent can maintain exclusive control over a blockchain-based master securityholder file;
• How on-chain wallet records should be linked with verified off-chain identities;
• How blockchain records should be produced for regulatory examination;
• How smart contracts can implement transfer restrictions and restrictive legends;
• How requirements should apply to public, private and permissioned distributed ledgers;
• How blockchain-based systems should address recovery and business continuity; and
• How transfer-agent requirements should interact with broker-dealer custody, clearing and settlement obligations.

These are no longer purely theoretical questions. They are becoming part of the SEC’s proposed operating framework for modern securities markets.

A potentially important step toward blockchain-native capital markets

The significance of the September 1 proposal is not simply that the SEC mentioned blockchain.

The more important development is that the Commission is proposing a regulatory framework under which blockchain may serve as the authoritative record of securities ownership—subject to meaningful requirements concerning control, accuracy, security, accessibility, compliance and investor protection.

Regulation Crypto Assets may modernize the capital-formation layer for crypto-related investment contracts. The Transfer Agent Rule Modernization proposal separately begins modernizing the ownership and recordkeeping layer.

Together, they suggest that the regulatory discussion is moving beyond whether securities can exist on blockchain and toward the rules necessary for blockchain-native securities markets to operate within the regulated financial system.

Primary SEC sources

• U.S. Securities and Exchange Commission: Proposed Rule—Registered Transfer Agents, Release No. 34-106246
• U.S. Securities and Exchange Commission: Fact Sheet—Proposed Transfer Agent Rule Modernization

This article is provided for general educational purposes only and does not constitute legal, investment or regulatory advice. The SEC proposal discussed above has not been adopted and may be revised through the rulemaking process.