SEC postpones tokenized stock trading exemption after exchange criticism

The U.S. Securities and Exchange Commission (SEC) has delayed the rollout of an “innovation exemption” that would have permitted crypto platforms and decentralized finance protocols to trade blockchain‑based representations of U.S. equities. The draft framework, originally expected in mid‑May, would have allowed on‑chain trading of tokenized shares of companies such as Apple, Tesla and Nvidia with features like 24/7 trading, fractional ownership and rapid settlement, and would have permitted third‑party tokenization without the issuer’s consent.

Traditional market participants—including Nasdaq, the NYSE and industry groups such as SIFMA—raised concerns about investor protection and market fragmentation. In response, the SEC has shelved the proposal for further internal review and has not set a new release date.

SEC Commissioner Hester Peirce clarified that any future exemption would be “limited in scope,” covering only digital representations of the same underlying equity that investors could already buy in the secondary market, and would exclude synthetic tokens. She said she “appreciates the interest – but not the hyperbole” about the exemption. Tokenized stocks currently hold about $1.5 billion in distributed value, part of a broader $33 billion market for tokenized real‑world assets.

Stakeholders such as Securitize president Brett Redfearn warned that allowing third‑party tokenization without issuer participation could fragment the market, while industry leaders like Superstate CEO Robert Leshner welcomed a stricter approach that preserves market standards.