The U.S. Securities and Exchange Commission (SEC) has proposed an overhaul of transfer agent regulations. Under the proposal, electronic databases, including distributed ledgers or blockchains, could serve as official master records for corporate share ownership.
Until now, on-chain tokens have lacked status as the final legal record of ownership. Transfer agents or issuers have remained required to maintain a separate register outside the blockchain ecosystem, reconciling both ledgers after every transaction.
If the new proposal is approved, qualifying blockchains would act directly as a single source of truth. Transfer agents would record every change of ownership within the digital ledger without duplicating data. Centrifuge Chief Legal Officer Eli Cohen noted that this proposal could potentially reduce a two-step operational model to a single step.
Compliance Controls at the Asset Level
Joris Delanoue, CEO of Fairmint, which operates a registered on-chain transfer agent entity, emphasized that compliance controls will remain embedded directly within the asset structure. These controls include identity verification, investor eligibility assessments, and strict restrictions to block transfers to unauthorized crypto wallets.
The new recording system relies on smart contracts designed to block asset transfer attempts before transactions reach the ledger if legal requirements are not met.
Cutting Processing Time to One Day
Processing times for certain corporate actions, which typically take 3-5 days, could now be cut to roughly a single day through the use of a unified digital record.
The SEC has not yet issued final approval for the proposal, and the eventual final rules will not automatically grant permission for all blockchain networks or token structures to operate as official record keepers.
Transfer agents will still bear responsibility for the accuracy of share ownership data on the network. They maintain mandatory roles in handling asset inheritance, responding to legal notices, and processing record updates following a shareholder’s death.
Reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
