Former SEC Counsel Exposes the Challenges of Creating Compliant…

The US Securities and Exchange Commission (SEC)’s shift in approach towards the crypto space is fostering the growth of Real-World Assets (RWAs), but jurisdictional and yield constraints continue to hinder the development of compliant models.

A Changing Regulatory Landscape

The regulatory dynamics surrounding RWAs have shifted in the US, according to Ashley Ebersole, Chief Legal Officer of Sologenic, a company that has been at the forefront of RWA innovation. Ebersole, who previously spent three years at the SEC, including serving on the agency’s internal working groups on crypto and securities law, has a deep understanding of the evolving regulatory environment. In 2017, the SEC published the DAO Report, asserting its jurisdiction over tokens that met the definition of securities. Following the report, the agency switched to an enforcement-led approach, leaving little room for dialogue with the industry.

“After the DAO Report, it was an enforcement response for the next two years,” Ebersole explained. “I expected there would be more of a rotation toward policy while I was still there—that didn’t happen.”

Ebersole attributed the hardened posture to the arrival of Gary Gensler as the new SEC Chairman in April 2021. The former Head of the Commodity Futures Trading Commission (CFTC) has maintained a tough stance on the industry, particularly with regards to the registration of digital assets as securities. This has created a communication breakdown between the SEC and industry stakeholders, making it challenging for companies to design legally compliant RWA products and on-chain securities models.

The Promise of Compliant RWAs

The market for tokenized real-world assets is scaling rapidly. According to a report by RWA.xyz, RWA products representing equity boomed in the last quarter of 2025, with Standard Chartered predicting that the value of non-stablecoin RWAs could reach $2 trillion by 2028. Major financial institutions are positioning themselves for this shift, with BlackRock exploring tokenization to modernize fund infrastructure and JPMorgan launching tokenized money-market products on Ethereum.

A Model for Compliance

Ebersole emphasized that compliant tokenization and RWA issuance are possible. One example involves stock tokens that function similarly to depository receipts, where a regulated clearing broker holds a corresponding share for each token owner. “You own it,” Ebersole stated. “It’s minted at the time of purchase, and it references contractual rights to a share of stock that was purchased at the same time.” This model differs from other tokenized stock products that offer price exposure without conferring ownership or a legal claim to the underlying asset.

Limitations of RWA Tokenization

While the interest in tokenized RWAs is accelerating, Ebersole warned that it does not eliminate geographical constraints. Securities laws remain nationally bound, even if blockchain infrastructure is not. An RWA structure compliant with US requirements does not automatically translate to the European Union or Asian markets, which have distinct licensing, disclosure, and distribution rules. “The toughest thing we hear about with tokenized RWA projects is the maze of legal requirements that apply to these assets if you’re doing them in a fully legally compliant way,” Ebersole said. “That’s true in the US, and it’s even more complicated globally.”

A Regional Approach

The regulatory fragmentation has led many platforms to focus on region-specific offerings. Robinhood’s tokenization offering, for example, is limited to EU users, who can trade tokenized US stocks and exchange-traded products, but without direct ownership of the underlying shares. Instead, the tokens mirror the prices of publicly traded securities, regulated as blockchain-based derivatives under the EU’s MiFID II directive.

Challenges Ahead

As the RWA market continues to scale, companies will need to navigate the complex web of regulatory requirements. Ebersole’s expertise highlights the need for a deeper understanding of the regulatory landscape and the importance of designing compliant models that cater to the specific needs of different regions.

Conclusion

The SEC’s evolving approach to crypto has paved the way for RWA growth, but the jurisdictional and yield constraints remain significant challenges. By understanding the nuances of regulatory requirements and embracing compliant models, companies can tap into the vast potential of RWAs and unlock the next wave of innovation in the crypto space.

FAQs

Q: What is the current state of real-world assets (RWAs) in the US?

A: The market for RWAs is scaling rapidly, with the value of non-stablecoin RWAs predicted to reach $2 trillion by 2028.

Q: What is the key challenge for RWA companies?

A: The primary challenge for RWA companies is not technology but regulatory engagement. The SEC’s shifting posture towards an enforcement-led approach has created a communication breakdown, making it difficult for companies to design legally compliant RWA products.

Q: What is one model for compliant RWA tokenization?

A: One example involves stock tokens that function similarly to depository receipts, where a regulated clearing broker holds a corresponding share for each token owner.

Q: How do RWA tokenization offerings differ across regions?

A: RWA tokenization offerings are subject to different regulatory requirements in various regions, such as the US, EU, and Asia. Companies must navigate a complex web of laws and regulations to offer compliant RWA products globally.

Q: What is the significance of the SEC’s evolving approach towards crypto?

A: The SEC’s shift in approach towards a more collaborative posture is expected to foster the growth of RWAs, but the jurisdictional and yield constraints remain significant challenges.

—