SEC clears five-year path for trading tokenized U.S. stocks on blockchain venues

The Securities and Exchange Commission on Thursday opened a regulated path for trading blockchain-based versions of publicly listed American stocks, issuing an order that lets specialized trading venues bypass some of the rules that normally govern stock exchanges. The agency called the measure the Innovation Exemption, a five-year conditional exemption aimed at drawing the trading of "tokenized" shares out of offshore and gray-market venues and into a framework the SEC can supervise.

The order, filed as Exchange Act Release No. 34-106402, exempts qualifying platforms, which the SEC labels Tokenized Securities Venues, from the legal definition of an "exchange" under the Securities Exchange Act of 1934, provided they use permissioned automated market makers and blockchain-based liquidity pools rather than a conventional order book. A parallel provision exempts the liquidity providers on those venues from dealer-registration requirements. Shares of tokenization-focused firms jumped immediately after the release, and Robinhood, whose existing crypto-token products sit at the center of a running debate over what such tokens actually represent, also moved higher.

The numbers

The exemption takes effect immediately and sunsets after five years unless the SEC acts to extend, narrow or make it permanent; the agency is simultaneously soliciting public comment on how the framework performs. Venues that want to tokenize a company's stock without that company's involvement must give the issuer written notice and a 30-day window in which it can object and block the listing; the venue then has one business day to confirm to the SEC that notice was given. The order also caps how many ticker symbols each venue may offer and how much volume it may process, with tighter ceilings on the framework's first cohort of listings, according to the order and legal analysts who reviewed it. Markets responded quickly: tokenization platform Securitize rose as much as 14% intraday, crypto exchange Bullish gained roughly 9% to 10%, Coinbase added about 5%, and Robinhood swung between a roughly 2% and 6% gain over the course of the session, according to trading data compiled by CoinDesk.

How we got here

The order caps a multi-year push by crypto firms and some traditional brokerages to bring tokenized versions of stocks — digital tokens meant to represent, or track the price of, shares such as Apple or Tesla — onto U.S. markets, after similar products had mostly operated offshore or in legal gray areas. Robinhood had already launched tokenized "Stock Token" products for customers outside the United States, structured as debt instruments issued through a Jersey-domiciled subsidiary that gave holders price exposure to a stock without ownership, dividends or voting rights. That structure drew public criticism this month from AMC Entertainment chief executive Adam Aron, who called tokens tracking his company's stock "vile" and said he had retained outside securities counsel to examine them. Robinhood responded by saying it would build in one-for-one share redemption and voting rights for token holders. The SEC's order arrived just two days after the Senate fell short, on a 49-50 vote, of advancing the Clarity Act, a broader bill meant to set comprehensive rules for digital-asset markets — a defeat that left the SEC's own exemptive authority as the fastest available route to a federal framework.

Who is affected

The exemption draws a hard line between tokens that carry the same legal rights as the underlying stock — dividends, voting, a claim on the company — and "synthetic" tokens that merely track a stock's price through a derivative-like structure. Only the former qualify. That distinction favors regulated tokenization infrastructure providers such as Securitize, Superstate, Dinari and Fairmint, along with Bullish, which has been expanding into tokenization through its acquisition of share-registry firm Equiniti, and it opens a lane for decentralized exchanges including Uniswap, Aerodrome and Raydium to serve as the underlying trading venues. It creates a harder problem for Robinhood, Kraken and Ondo Finance, whose existing stock-token products are built as synthetic, price-tracking instruments that appear to fall outside the new framework unless they are restructured to confer real shareholder rights. Publicly traded companies, meanwhile, gain a formal veto: any venue that wants to tokenize their stock without their cooperation must now ask first and wait a month before proceeding.

Reaction

SEC Chairman Paul Atkins framed the order as a shift toward "technology-neutral regulation," saying the commission was moving "to bring America's capital markets into the digital age by facilitating onchain trading of certain tokenized stocks." Jamie Selway, director of the agency's Division of Trading and Markets, called the vote "an important milestone for the Commission's work to open our capital markets for tokenized securities." Executives at firms poised to benefit were more expansive.

"The SEC innovation exemption is a signal that tokenization is ready to come to the United States. This is a major step by the agency and will allow liquid tokenized securities markets to develop onshore," said Johann Kerbrat, Robinhood's head of crypto.

Securitize chief executive Carlos Domingo said the order "gives a way to trade real tokenized stocks," while Fairmint chief executive Joris Delanoue called the issuer notice-and-objection process "the key safeguard" in the framework. Bullish's Thomas Cowan was more measured, describing the exemption as "definitely not a broad opening" but "a fantastic start."

What happens next

Because the relief is explicitly temporary and framed as a pilot, its long-term fate depends on how the next five years unfold and on the public comments the SEC has invited on the order. Robinhood has said in-kind redemption and voting rights are "coming" for its existing token holders, which would be one path to bringing its product inside the new rules, and it has pointed to its Say by Robinhood shareholder-engagement tool as infrastructure it could repurpose for that purpose. Companies whose shares are likely tokenization targets now face a practical decision each time a venue files notice: object within 30 days or allow trading to proceed. Traditional exchange operators, who were not the direct subject of Thursday's order, are widely expected to watch the pilot closely for signs that liquidity in tokenized shares begins drawing volume away from conventional listings, a dynamic that trade publications covering the order and wire-service reporting on the announcement both flagged as the central open question the exemption leaves unresolved.