SEC exemption opens U.S. pathway for tokenized stock trading

Traders Union
All News
Crypto
SEC pathway for tokenized stocks

Highlights

SEC exemption enables trading of fully backed tokenized U.S. stocks with shareholder rights, excluding synthetic tokens that only offer price exposure.
Issuer veto provision requires venues to notify public companies and wait 30 days before trading tokenized shares, granting issuers the right to block listings.
Exemption allows automated market makers on public blockchains for tokenized securities under strict KYC, trading volume, and listing limits, benefiting DeFi venues like Uniswap and Ethereum.

Framework favors fully backed tokenized shares

As first reported by CoinDesk, the U.S. Securities and Exchange Commission’s exemption is designed for tokenized stocks that represent real U.S. shares and carry the same rights as traditional equity, including dividends and voting rights.

Carlos Domingo, CEO of Securitize, said the change is strongly positive because it creates a way to trade real tokenized stocks. He said the framework supports models tied directly to issuers as well as custodial structures that preserve full shareholder rights, while excluding products that only offer price exposure.

The SEC is also giving public companies a direct role when an outside party seeks to tokenize their shares. Before trading can begin, a venue must notify the issuer and wait 30 days, and if the company objects, the token cannot trade under the exemption.

Joris Delanoue, CEO and co-founder of Fairmint, said the issuer veto is the key safeguard. The provision follows criticism this summer from AMC Entertainment CEO Adam Aron after Robinhood offered AMC-linked stock tokens without the company’s involvement.

Synthetic products that track a stock’s price without conferring the same rights do not qualify. That creates pressure on offshore offerings such as Robinhood’s Stock Tokens, Kraken’s xStocks and Ondo Finance’s offshore products if their providers want access to the new U.S. route.

Gabo Otte, CEO of Dinari, said the SEC is drawing a clear line around what tokenized equities should represent, arguing that moving stocks onchain should not strip away the rights attached to them. Robinhood crypto head Johann Kerbrat nonetheless welcomed the move, calling it a major step toward onshore tokenized securities markets in the United States.

DeFi venues gain an opening under strict limits

On the trading side, the exemption allows tokenized securities venues to use automated market makers on public blockchains without registering as traditional securities exchanges. That could benefit DeFi trading applications such as Uniswap, Aerodrome and Raydium, along with blockchains including Ethereum, Solana and BNB Chain.

Thomas Cowan, global head of tokenization at Bullish, said the decision is a step in the right direction because it shows regulators are considering how to enable AMMs and new market structure. He cautioned, however, that the exemption remains a controlled first step rather than a full onchain stock market.

Zach Pandl, head of research at Grayscale, said the framework could bring more utility and activity to tokenized assets and the public blockchains supporting them. Even so, access must remain controlled through KYC, trading limits and broader securities-market guardrails, creating what could become a regulated version of DeFi for U.S. securities.

Jim Petrila, chief legal officer at Dromos Labs, said the exemption is a meaningful positive signal for DeFi but warned that uptake may be slow because permissioned infrastructure must be layered onto decentralized systems. He said gating requirements and asset approval rules may keep the initial scope limited, including among centralized venues.

For now, the SEC is keeping the experiment narrow, with limits on the number of stocks venues can list and their share of trading volume. Still, the framework gives tokenization firms, liquidity venues and transfer agents a defined U.S. path they have not had before, and Superstate CEO Robert Leshner said he expects issuers to rethink products and launch new structures that conform to the rules.

Our earlier article on the SEC’s Innovation Exemption explained how the regulator opened a five-year pathway for certain venues to offer tokenized versions of publicly traded U.S. stocks under strict safeguards. It highlighted that eligible stock tokens must preserve full shareholder rights such as dividends and voting, and that issuers can object to having their shares tokenized, underscoring the SEC’s effort to set practical boundaries for tokenized securities while broader legislation remains stalled.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.