Woofun AI reports that the Securities Transfer Association submitted a comment letter to the U.S. Securities and Exchange Commission, warning that third-party issued stock tokens could undermine market integrity. The association argues that genuine tokenized securities must be formally authorized by issuing companies and recorded on official shareholder registers, rather than relying on wrapped products from independent platforms.

The STA highlights that third-party tokens expose investors to platform credit, custody, and operational risks without establishing direct legal relationships with issuers. Consequently, the group urges regulators to prioritize issuer-supported models in future rulemaking and reform the Direct Registration System to meet real-time settlement demands. It also recommends collaboration with the Depository Trust & Clearing Corporation to optimize digital securities infrastructure.