The SEC's January 2026 tokenization taxonomy does not change your raise limit, your investor eligibility, or your filing requirements under Regulation A+. What it does is establish a clear legal framework for how tokenized securities are classified — and clarify, specifically, which parts of the new DTC tokenization pilot actually apply to your company (the short answer: less than you may think).
For founders and CFOs currently running or evaluating a Reg A+ offering, this guidance matters. The regulatory environment around tokenized securities is moving fast. Understanding where Reg A+ fits and where it doesn't is essential before any decisions about offering structure are made.
Note on terminology: In SEC documentation and throughout this post, companies conducting a Reg A+ raise are referred to as "issuers," the legal term for any entity offering securities to the public. The two terms mean the same thing.
What Is a Tokenized Security Under the SEC's 2026 Guidance?
On January 28, 2026, the SEC's Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets issued a joint statement on tokenized securities defining the taxonomy of tokenized securities. Per that statement, a tokenized security is a financial instrument enumerated in the definition of "security" under the federal securities laws that is formatted as or represented by a crypto asset, where the record of ownership is maintained in whole or in part on or through one or more crypto networks.
The SEC organized tokenized securities into two broad categories: issuer-sponsored and third-party sponsored.
Issuer-sponsored tokenized securities are those where the company recognizes that a single class of security may be issued in multiple formats for example, securities in book entry format and securities in tokenized format. Companies may tokenize a security by integrating distributed ledger technology into the systems that record owners of the security so that an on-chain transfer results in a transfer of the security on the master securityholder file.
Third-party sponsored tokenized securities encompass custodial models, where a third party holds an unaffiliated company's security and issues a crypto asset representing the underlying security, and synthetic models, where a third party issues instruments providing economic exposure to an underlying security without conveying ownership rights.
For a company raising capital through Reg A+, the relevant path is the issuer-sponsored model. The third-party synthetic model carries distinct legal risks. Companies will need to carefully evaluate the nature and structure of their tokenized security to consider whether it may be a security-based swap and the scope of applicable regulations, which may include obligations under the Commodity Exchange Act, as Sidley Austin notes in their analysis of the SEC's January 28 statement.
To understand how Regulation A+ offerings are structured before layering in any tokenization decision, that context matters.
Does the DTC Tokenization Pilot Apply to Companies Raising via Regulation A+?
On December 11, 2025, the SEC issued a no-action letter to the Depository Trust Company allowing it to launch a three-year pilot for tokenized securities. DTC aims to launch the pilot in the second half of 2026, and under the pilot, DTC participants may elect to have their security entitlements recorded as tokens on distributed ledgers rather than exclusively on DTC's centralized ledger.
Here is what most coverage of this pilot gets wrong when read by a Reg A+ company: the DTC pilot is available to DTC participants, primarily large broker-dealers and banks. As Morgan Lewis confirmed in their analysis of the no-action letter, public companies that are the issuers of securities held at DTC are generally not DTC participants and therefore will not be able to unilaterally request that entitlements to their securities be tokenized under the program.
There is a further constraint worth noting. Eligible securities under the pilot include highly liquid securities, such as Russell 1000 constituents, US Treasuries, and ETFs that track major indices including the S&P 500 and the Nasdaq-100. Mid-stage companies raising capital through Reg A+ are not included in that eligible securities set.
The practical upshot for a company raising via Reg A+: if you want to issue tokenized securities, you are not waiting for the DTC pilot to unlock that path. You are operating under the issuer-sponsored model defined in the January 28 taxonomy and that path is available now, provided your offering structure, disclosure documents, and transfer agent arrangements reflect the specific tokenization model you are using. How a Reg A+ offering qualification works is the right starting point before evaluating any tokenized structure on top of it.
What Does Tokenized Format Actually Change for a Reg A+ Offering?
The clearest message from the January 28 guidance is this: the SEC's Division staff emphasizes that securities laws apply regardless of whether a security is tokenized, and that the format in which a security is issued or the methods by which holders are recorded do not alter the applicability of federal securities laws, as Morrison Foerster summarized in their review of the statement.
That means a Regulation A+ Tier 2 offering, which allows companies to raise up to $75 million per year from both accredited and non-accredited investors, as of 2026 (SEC.gov), remains subject to the same SEC Qualification requirements whether the securities are issued in traditional book-entry format or in tokenized form. The exemption does not change. The offering circular requirements do not change. The investor eligibility rules do not change.
What does change is the recordkeeping infrastructure and, potentially, the disclosure language in your offering circular. If your Reg A+ securities are issued in tokenized format using a DLT-integrated master securityholder file, that structure should be clearly described to investors, including the specific blockchain used, the wallet and transfer mechanics, and what happens in the event of a technical failure. Manhattan Street Capital, which has quarterbacked Reg A+ offerings since the regulation launched in 2015, advises companies to treat tokenization as an infrastructure decision, not a regulatory shortcut.
Frequently Asked Questions
Can Regulation A+ securities be tokenized?
Yes. Under the SEC's January 28, 2026, statement, a company can issue Reg A+ securities in tokenized format using a distributed ledger as the master securityholder file. The token transfer on-chain directly records ownership. The offering must still be qualified by the SEC under Reg A+, and all standard disclosure and reporting obligations apply. Investors should review the full offering circular and consult a financial advisor before making any investment decision.
Does tokenizing a Reg A+ offering change the SEC Qualification process?
No. The method of recording ownership, a conventional off-chain database versus an on-chain distributed ledger, does not alter the applicability of federal securities laws. All transactions in securities, regardless of record maintenance format, must comply with the SEC's registration requirements or utilize an available exemption, per the SEC's January 28 guidance. Reg A+ is that exemption. The Qualification process, Form 1-A requirements, and ongoing reporting obligations remain the same.
Does the DTC tokenization pilot expand the number of investors who can participate in a Reg A+ offering?
No. Regulation A+ already permits participation by both accredited and non-accredited investors from anywhere in the world — as of 2026 (SEC.gov). The DTC pilot operates at the intermediary level among DTC participants and does not modify investor eligibility rules under Reg A+.
What are the risks of using a third-party synthetic tokenization model for a Reg A+ offering?
Synthetic models encompass linked securities and security-based swaps, as defined in the SEC's January 28 taxonomy. A linked security is issued by a third party providing synthetic exposure to a referenced security but carries no obligation from the original company. For companies raising via Reg A+, this structure could introduce Commodity Exchange Act obligations and complicate investor rights disclosures significantly. Companies evaluating tokenization should work with qualified legal counsel and a SEC-registered transfer agent before selecting a model. If you are earlier in your planning process, understanding what a Test the Waters campaign involves before filing is a practical first step.
What Reg A+ Companies Should Do Now
The SEC's 2026 tokenization taxonomy is a framework, not a mandate. Companies are not required to tokenize their securities, and the January 28 guidance does not make tokenization easier or cheaper than traditional issuance. What it does provide is legal clarity for companies that have been evaluating tokenized offerings and needed confirmation that the issuer-sponsored model has a defined regulatory path.
If your company is exploring whether a tokenized Reg A+ offering is the right structure, start with the basics: confirm your transfer agent is equipped to support a DLT-integrated master securityholder file, review your offering circular disclosure with qualified counsel, and verify that your chosen blockchain is approved under any applicable exchange or trading system rules. To explore whether Regulation A+ — tokenized or otherwise — is the right capital raise path for your company, contact the MSC team at manhattanstreetcapital.com/contact-us or visit manhattanstreetcapital.com to learn more.
Disclaimer: This post is for informational purposes only. Manhattan Street Capital is not a law firm, underwriter, or broker-dealer. This does not constitute an offer to sell securities. Investments in early-stage companies involve significant risk. Consult professional advisors before making investment decisions.
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Rod Turner
Rod Turner is the founder and CEO of Manhattan Street Capital, the #1 Growth Capital service for mature startups and mid-sized companies to raise capital using Regulation A+. Turner has played a key role in building successful companies, including Symantec/Norton (SYMC), Ashton Tate, MicroPort, Knowledge Adventure, and more. He is an experienced investor who has built a Venture Capital business (Irvine Ventures) and has made angel and mezzanine investments in companies such as Bloom, Amyris (AMRS), Ask Jeeves, and eASIC.
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