Prometheum Outlines Legal Framework for Tokenized U.S. Stocks

Prometheum, together with HashKey Digital Asset Group and Velocity Capital, has described a proposed structure that lets international investors access tokenized U.S. stocks while preserving the legal protections of traditional securities.

Ownership and Custody Model

The tokens will represent a "digital twin" of shares held by Cede & Co., the nominee of the Depository Trust Company (DTC). Under Article 8 of the Uniform Commercial Code, the token holder will not appear on the issuer’s shareholder register; instead, the participant that connects to a registered blockchain wallet will hold a securities entitlement for the customer.

Legal Protections

• Customer rights stem from the participant’s duties under UCC Article 8, the SEC’s Customer Protection Rule, and the Securities Investor Protection Act (SIPA).
• In the event of a broker‑dealer failure, SEC Rule 15c3‑3 requires segregation of customer securities, and SIPA provides additional protection.
• Dividends, stock splits and other corporate actions will flow through DTC’s standard processes.

Conversion and Redemption

Investors can convert tokens back into conventional shares or sell them for cash through the broker‑dealer. Both actions will use DTC’s existing clearing and settlement infrastructure.

Distinction from Synthetic and SPV Products

Unlike synthetic tokens that only track price, or special‑purpose vehicle (SPV) structures where an offshore entity holds the shares, the proposed tokens are backed by shares directly custodied at DTC, giving token holders a direct or beneficial interest in the underlying security.

Regulatory Context

The structure aligns with a recent SEC exemption that requires tokenized National Market System stocks to provide the same voting, dividend and liquidation rights as their conventional counterparts. The exemption does not cover synthetic products that lack these rights.

International Distribution

HashKey will act as the international distributor, offering access through licensed exchanges in multiple jurisdictions. All participants must comply with local licensing, investor eligibility and regulatory requirements.

Potential Asset Coverage

• Shares of companies in the Russell 1000 index
• Exchange‑traded funds tracking major indexes
• U.S. Treasury bills, notes and bonds

Next Steps

The pilot remains subject to final agreements, regulatory clearance, technical integration and the availability of DTCC’s tokenization service, slated for full launch in October 2026.