How T7X Is Building the Infrastructure for a New Era of Capital Markets

Most tokenized stocks aren't natively issued on a blockchain. They begin as conventional shares, sit with a broker or custodian, and are then represented by tokens issued separately. In effect, the market has largely replicated traditional securities structures on-chain instead of rethinking them from the ground up. The token "may track the value of the underlying shares," writes Ivan Kan, CMO of tokenization platform T7X, in an essay shared with Decrypt, "but the token holder is not necessarily the shareholder of record."

While the holder owns the price movement, whether they own the share is another matter altogether. The SEC set out three models in January: issuers tokenizing their own shares, third parties issuing tokens against shares held in custody, and firms issuing a separate security for synthetic exposure.

Writing for Forbes' Technology Council in August, Kan cited Pantera Capital research covering 593 tokenized assets across 11 asset classes, of which 77.6% were what Pantera called "digital wrappers around traditional infrastructure" rather than securities in their own right.

"What does the token legally represent, and who authorized it?" Kan asks, setting out an alternative model that T7X Equities is pursuing, which they dub "native issuance." A security exists because an issuer authorizes it, they argue, and "blockchain does not eliminate those corporate and securities-law requirements."

One token, one security, one issuance

Under the native issuance model, the token is part of the authorized issuance from the start, running from issuer authorization to investor verification to transfer-agent validation, aiming at "one security, one authorized issuance, one ownership record, one digital representation."

Wyoming, Delaware, and Nevada corporate law recognizes a "certificate token," allowing shares to be represented electronically on a blockchain. T7X is incorporated in Wyoming and structures its issuances to operate within this framework. The blockchain then becomes "part of the infrastructure supporting the capitalization table" instead of being just another instrument layered on top.

The transfer agent keeps the official master securityholder file and the blockchain records transactions, while the legal record of ownership stays where regulators expect it.

In T7X's administrated offerings, that transfer agent is T7X Equities. Transfer agents register with the SEC and hold the authoritative record of who owns a security, processing transfers and maintaining the master file, which puts the company inside the model it is advocating as well as behind it. Its first example is Tranquil Healthcare Fund I, a Tier 2 Regulation A+ offering of up to $75 million that the SEC qualified on June 29. T7X Equities issues tokens representing its shares on Trusted Smart Chain and delivers them to investors' wallets, the company said.

"There's a registered, SEC-regulated gatekeeper that determines who owns which security at any point in time," T7X Chief Executive Pablo Penaloza said at Consensus in Miami earlier this year. "As long as you have a transfer agent involved, there is no way that securities can disappear without trace."

RWA+

Kan calls the broader category "RWA+." The plus doesn't refer to any single rule, he argues, but the requirement that "compliance and oversight are real," and it rests on three elements. Native issuance creates the token as part of the security's authorized issuance. Integrated compliance writes investor verification and disclosure into the instrument from the start, not as an afterthought. Legally enforceable ownership puts the token holder on the transfer agent's record.

"A receipt is not an asset," Kan wrote in Forbes. "It is a claim wrapped around one, dependent on an intermediary to honor it." Synthetic "PreStocks" tied to SpaceX and Anthropic were never valid claims, he noted, because neither company authorized the transfers. Done properly, he argues, "ownership, compliance and settlement are the same fact."

Whether a token carries the rights of a share is becoming the dividing line elsewhere, too. The SEC's new innovation exemption covers tokenized stocks carrying dividends and voting rights while excluding price-tracking synthetics, and Nasdaq's arrangement with Kraken turns on tokens conveying the same voting rights as ordinary shares.
SEC Clears a Path for Tokenized Stocks After Clarity Act Stumbles

Penaloza pins the near-term opportunity on companies raising under $100 million, usually between $50 million and $75 million, through Regulation A offerings.

Regulation A+, Kan argues, suits this model because it permits public solicitation and non-accredited participation while requiring audited financials and continuing disclosure. Most tokenized assets rely instead on Regulation D placements, limited to accredited investors. Reg A also opens the door, Penaloza notes, to retirement accounts. Unregistered securities can legally sit in a self-directed IRA, but many brokers won't hold them and most investment advisers steer clients away. "The money is sitting in the older generations' retirement accounts," he said, and a registration attached to the investment is what makes an individual retiree comfortable holding it.

For investors already holding these securities, the benefit is an exit. Shareholders in Reg A and Reg D placements typically receive a paper certificate and then "have to go around and find somebody who will want to give them liquidity," Penaloza said. A native digital security can trade on a secondary market, he said, settling wallet to wallet without a custodian in between.

Giving Reg A and Reg D holdings somewhere to trade would, he argued, "incredibly speed up not only the rate of capital formation, but also the liquidity in the market." Within five years, he predicts, "the total tokenized portfolio will far surpass the existing market capitalization of what is currently trading on all the public markets."

To find out more about T7X's real-world asset tokenization platform, head to t7x.com.

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