SEC Delays Tokenized Stocks Innovation Exemption Amid Concerns: Bloomberg

The Securities and Exchange Commission has withdrawn plans to release a broad exemption allowing US crypto companies to trade tokenized stocks and other tokenized assets. Bloomberg reported on Friday. The move delays a high-profile effort to integrate blockchain into mainstream securities markets.

Agency staff had been preparing to release the so-called innovation exemption as early as this week, according to people familiar with the matter who spoke on condition of anonymity. But the timeline has shifted as the SEC absorbs feedback from exchange officials and other market participants who have held discussions with agency employees in recent days.

A central sticking point is a provision that allows trading in third-party tokens: digital representations of company shares issued without the knowledge or approval of the underlying companies.

That prospect has alarmed some former regulators and market experts. Bloomberg said, warning that this could create thorny problems for public companies trying to pay dividends and count shareholder votes as tokens spread across networks.

SEC Chairman Paul Atkins had previously indicated that the agency would soon introduce its proposed innovation exemption, which could function as a regulatory sandbox for on-chain stocks. The delay affects companies preparing to launch tokenized asset projects within the expected framework.

Amid criticism of the delayed relief, SEC Commissioner Hester Peirce defended the proposal’s narrow focus.

The framework was “limited in scope and would only facilitate trading in digital representations of the same underlying stocks that an investor could buy on the secondary market today, and not in synthetics,” Peirce said. wrote on X. She added that she appreciates the public interest in the rule, but not the exaggeration surrounding it.