#sectokenizedstockexemption The U.S. SEC is reportedly preparing an “innovation exemption” that could allow trading of tokenized stocks on crypto platforms with lighter regulatory requirements. (Reuters)
Key details of the proposed exemption:
It may permit crypto platforms to trade blockchain-based versions of public stocks without needing full traditional exchange registration. (KuCoin)
The framework could include “third-party tokenized stocks,” meaning tokens created without direct approval from the underlying public company. (Ledger Insights)
Some tokenized shares may not provide normal shareholder rights like voting or dividends, depending on the structure. (Reuters)
SEC Chair Paul Atkins previously described the plan as a “cabined framework” to allow experimentation while broader rules are developed. (Reddit)
This is part of a broader U.S. push toward tokenized finance:
Nasdaq already received SEC approval for tokenized trading and settlement of some stocks and ETFs earlier this year. (Reuters)
The SEC also recently clarified that tokenized securities are still securities under existing federal law, even if they trade on blockchain infrastructure. (Morgan Lewis)
Potential implications:
24/7 stock trading,
near-instant settlement,
global blockchain-based access to equities,
and stronger convergence between crypto markets and traditional finance. (MarketWatch)
Critics, including traditional exchanges, warn the exemption could weaken investor protections if crypto firms bypass rules applied to stock exchanges and brokerages. (Reuters)