Securitize Gains SEC Adviser Status as Shares Drop 10%

Securitize Capital LLC registered with the US Securities and Exchange Commission as an investment adviser, a move that expands the company's regulated reach. Shares of parent Securitize (SECZ) fell more than 10% on Monday to about $6.76, giving it a market capitalization just under $1 billion.

The registration became effective July 22, according to the SEC's Investment Adviser Public Disclosure database. The Miami-based subsidiary had operated as an exempt reporting adviser in Florida since March 2023, a status that limited it to advising venture capital funds or private funds with less than $150 million in US assets under management. Full registration removes those caps. It adds disclosure, compliance, recordkeeping and examination duties under the Investment Advisers Act of 1940.

“Becoming an SEC-registered investment adviser is an important step in the continued expansion of Securitize’s platform,” co-founder and CEO Carlos Domingo said. “Asset managers and institutional investors want to work with partners that understand both the opportunity of tokenization and the obligations that come with operating in regulated markets.”

The company noted that registration does not represent an SEC endorsement or indicate a particular level of skill or training.

Securitize Markets runs an SEC-registered broker-dealer and an alternative trading system. Other affiliates provide transfer-agent and fund-administration services. FINRA also approved Securitize Markets in May to custody tokenized securities and support atomic settlement.

The company reported more than $5 billion in assets under management as of July across products linked to BlackRock, Apollo, BNY, Hamilton Lane, KKR and VanEck. BlackRock’s BUIDL tokenized Treasury fund accounts for about $2.6 billion of that total. AlphaScala gives KKR an Alpha Score of 47 out of 100, a Mixed rating.

The registration follows SEC Commissioner Hester Peirce’s July 22 warning that managing certain vaults and lending strategies may create investment adviser obligations. Peirce urged businesses operating within the securities market to engage with the regulator while developing compliant onchain products.

SECZ shares have fallen since their New York Stock Exchange debut earlier in July. Citi analyst Peter Christiansen initiated coverage with a Buy rating and a $10 price target, representing about 34% upside from Friday’s close of $7.47. Christiansen described Securitize as important infrastructure for real-world asset tokenization but flagged risks including reliance on BlackRock’s BUIDL fund and uncertainty over higher-margin transaction revenue.

Securitize entered public markets on July 2 through a merger with Cantor Equity Partners II that raised about $400 million in gross proceeds. It tokenized its own SECZ shares on the listing date. Cantor and Securitize announced a partnership on July 15 to incorporate blockchain infrastructure into IPOs and follow-on offerings. Cantor will provide capital-markets and trading services, while Securitize will manage the issuance and trading of tokenized securities. Unlike products that create blockchain representations of stocks already trading, the arrangement places onchain infrastructure within the original securities issuance process.

South Korean conglomerate Hanwha Group is Securitize’s largest shareholder, with a 9.6% stake, according to SEC filings. Securitize is also working with the NYSE on infrastructure for the exchange’s planned tokenized securities platform. The adviser registration gives the company another regulated US entity as it expands from issuing tokenized funds into portfolio management and public-market settlement.

For more on how tokenized securities are being challenged by traditional intermediaries, see Transfer agents push SEC to restrict unaffiliated tokenized stocks.