Understanding Compliance for Real-World Assets (RWAs)

Ashley Ebersole, the chief legal officer of Sologenic and a former counsel at the SEC, discusses the evolving landscape for real-world asset (RWA) compliance in the cryptocurrency space. He emphasizes that ongoing regulatory engagement has been the primary barrier rather than technology, and shares insights on the current state of tokenization, compliance challenges, and how recent changes within the SEC could lead to more open dialogue with the crypto industry.

Key Takeaways

Regulation has been the main hurdle for RWAs rather than technological limitations.
The SEC's approach has shifted, becoming more open to dialogue with crypto firms recently.
Major financial institutions are advancing in the tokenization space, projecting a substantial market growth for RWAs.
Legal constraints and differing regulations across regions can complicate the tokenization of RWAs.
Understanding compliance discrepancies is crucial for RWA projects, especially regarding yield generation.

Former SEC counsel explains what it takes to make RWAs compliant

The Compliance Challenge for Real-World Assets

According to Ashley Ebersole, former SEC counselor and current chief legal officer at Sologenic, the main obstacle for real-world assets (RWAs) has been regulatory issues rather than the related technology. Ebersole, who joined the SEC in 2015, explained that there has been little room for dialogue between the regulatory body and crypto firms, especially following the SEC's 2017 DAO Report, which clarified that certain tokens could be classified as securities. This report initiated an enforcement-heavy approach for over two years, limiting exchanges between SEC staff and the crypto industry.

After Ebersole's departure from the SEC, this strict posture intensified under Chairman Gary Gensler, who took office in 2021. Consequently, communication broke down, making it increasingly complex for companies to develop legally compliant RWA products and delaying the rollout of on-chain securities models.

RWA products representing equity boomed in the last quarter of 2025. Source: RWA.xyz

Implementing Compliant RWAs

The market for tokenized RWAs is rapidly expanding. June projections by Standard Chartered anticipate the value of non-stablecoin RWAs could reach $2 trillion by 2028, mainly due to the tokenization of equities, funds, and traditional financial products transitioning to blockchain.

Leading financial institutions are preparing for this shift. For instance, BlackRock is exploring tokenization to modernize its fund infrastructure; meanwhile, JPMorgan has already launched money-market products tokenized on the Ethereum blockchain. Ebersole mentioned, “There is a right way to do compliant tokenization and issue tokenized assets. It absolutely can be done.”

Ebersole highlighted one promising model: stock tokens that act similarly to depository receipts. When a user buys a token, a corresponding share is acquired and maintained by a regulated broker, and a token is minted that represents rights to that share. Unlike other tokenized stock products which offer price exposure without ownership, these tokens confer legal rights related to ownership.

Recent developments illustrate the importance of this distinction. In late July, Robinhood attempted to promote tokenized exposure linked to OpenAI but had to clarify that any equity transfer required prior approval, which was not provided.

Disconnects in RWA Tokenization

Although interest in tokenized RWAs is increasing, Ebersole cautioned that this does not remove geographical barriers created by securities regulation. Many RWA projects face legal and jurisdictional limitations, as securities laws are often specific to national contexts.

An RWA model meeting US compliance may not satisfy regulatory requirements in the European Union or Asian nations, where differentiated licensing, disclosure, and distribution regulations apply. “The toughest challenge we hear about with tokenized RWA projects is navigating the complex legal landscape involved in maintaining full compliance,” Ebersole remarked.

This fragmentation has led many platforms to focus on region-specific offerings. For example, Robinhood's tokenization features are currently available only to EU users, allowing trading in tokenized US stocks while offering no direct ownership of the actual shares. The tokens simply follow the prices of publicly traded securities and are treated as blockchain-based derivatives under the EU's Markets in Financial Instruments Directive II (MiFID II).

Robinhood has tokenized 1,493 assets consisting of stocks and exchange-traded products. Source: Entropy Advisors/Dune Analytics

Yield and Regulatory Compliance

Yield generation is another area where RWA tokenization often faces regulatory obstacles. Ebersole pointed out that regulators differentiate between yield produced through active user involvement, like validating transactions, versus yield earned passively by simply holding a token. Passive yield is typically viewed as characteristic of a security.

This distinction has shaped enforcement actions and affects the structure of tokenized products. While regulatory perspectives on staking and other yield-generating methodologies have evolved under the current SEC leadership, Ebersole warns that passive yield remains a sensitive issue in the legal framework.

A Regulatory Shift for RWA Growth

The recent changes in how the SEC engages with the crypto industry mark a notable shift. Previously dominated by enforcement, the SEC's approach is softening. With new leadership, like Paul Atkins, the agency is increasingly welcoming industry dialogue, encouraging firms to clarify how they intend to align with regulatory goals.

“Now the SEC is engaging a lot with the industry, saying, ‘Come in and tell us if you are trying to do what we’re trying to do, how would you do it?’” Ebersole stated.

In this more collaborative environment, compliant models like tokenized equities developed through regulated intermediaries could transition from mere concepts to practical applications. Though legal challenges still exist regarding cross-border distribution and yield generation, the movement away from an exclusively enforcement-focused mentality suggests that more tailored regulations may emerge as the industry works through remaining gaps.