Securitize Corp. shares fell 9% after its subsidiary registered as an SEC investment adviser, unlocking expanded advisory capabilities for tokenized assets. Citi initiated coverage with a Buy.
Shares of Securitize Corp. (SECZ) fell 9.77% to $6.74 on Friday, a day after the company disclosed that its subsidiary Securitize Capital LLC had registered as an investment adviser with the Securities and Exchange Commission. The decline came despite the regulatory milestone, which removes previous limits on the firm's advisory operations.
The registration took effect July 22, shifting Securitize Capital from an exempt reporting adviser to a full-fledged registered investment adviser under the Investment Advisers Act of 1940. The change places the unit under comprehensive SEC oversight with stricter compliance obligations, the company said in a statement. It also allows the firm to offer portfolio management services for blockchain-based investment vehicles beyond the venture capital and small private fund structures permitted under the previous status.
Securitize now holds a suite of SEC-regulated licenses: a broker-dealer, an alternative trading system, a transfer agent, fund administration, and the new investment adviser registration. The firm said the expanded authority will help it work with institutional asset managers and professional investors on tokenized securities, lending products, and diversified portfolios. The platform reported more than $5 billion in assets under management as of July, including BlackRock's BUIDL fund, which accounts for roughly $2.6 billion, as well as products linked to Apollo, BNY, Hamilton Lane, KKR (an Alpha Score 47, labeled Mixed), and VanEck.
Citi initiated coverage of Securitize with a Buy rating and a $10 price target. The bank described the firm as a critical infrastructure provider for real-world asset tokenization. Citi flagged risks including dependence on BlackRock's BUIDL fund, sensitivity to interest rates, and uncertainty around future transaction fee growth.
Securitize went public July 2 through a merger with Cantor Equity Partners II, raising about $400 million. The company tokenized its own equity on the debut day and later partnered with Cantor to bring blockchain technology to initial public offerings and public equity deals. Hanwha Group became the largest institutional investor, holding a 9.6% stake. Securitize is also working with the New York Stock Exchange on tokenized securities infrastructure.
The adviser registration comes as the SEC continues to shape rules for onchain finance. Commissioner Hester Peirce has suggested that certain crypto vaults and lending mechanisms could trigger investment adviser registration requirements, putting Securitize ahead of potential regulatory shifts.
For more on the firm's broader tokenization play, see Securitize Gains SEC Adviser Status as Shares Drop 10%.
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