SEC grants 5-year innovation exemption allowing on-chain platforms to list and trade tokenized US stocks without immediate exchange classification.
Regulation & Gov ·
The U.S. Securities and Exchange Commission approved a 5-year conditional exemption allowing blockchain-based trading venues to list and trade tokenized securities without registering as exchanges under securities law. The exemption permits these venues to operate automated market makers and liquidity pools for tokenized stocks. SEC Chairman Paul Atkins stated the measure enables onchain trading of tokenized stocks that provide holders with the same rights as traditional securities, including dividend and voting rights, explicitly excluding synthetic derivatives.
The exemption applies only to tokens representing genuine ownership of underlying shares rather than derivative instruments. Issuers retain the ability to block third parties from tokenizing their offerings. Venues need only provide notice before commencing operations; no formal SEC designation is required. The temporary framework establishes what Atkins described as a "permissioned environment" while the Commission evaluates whether additional rulemaking is needed to support sustained onchain trading.
The exemption's five-year window leaves open whether permanent rules will follow. The SEC released this policy shortly after a legislative effort addressing crypto market structure stalled in the Senate. Questions remain regarding how trading venue operators will implement compliance procedures and whether the timeframe will prove sufficient for institutional adoption of tokenized equities.