SEC delays plan for crypto firms to trade tokenized stocks

Investing.com -- The Securities and Exchange Commission has postponed a plan to provide exemptions for U.S. crypto firms to trade tokenized assets linked to stocks, Bloomberg reported Friday.

The SEC staff was preparing to release its innovation exemption for tokenized stocks as soon as this week. A draft of the plan had been prepared and reviewed by staff.

The timing has been pushed back as the SEC considers input from stock-exchange officials and other market participants who held discussions with agency staff in recent days to learn details of the plan. One part that raised concerns is a move to allow trading of third-party tokens, which would be issued without the backing or consent of the public companies involved.

The SEC has not made any decisions to change its draft proposal.

Under the SEC's proposal, platforms offering tokens would need to guarantee investors receive the same rights as regular shareholders, including dividends and voting rights. Several former regulators said it is unclear how companies would technically fulfill those obligations given that tokens change hands on pseudonymous blockchain networks.

Not all SEC officials would support a decision to allow trading of third-party tokens, according to the report.

Commissioner Hester Peirce, an ally of SEC Chairman Paul Atkins, posted on X Thursday that she expects the innovation exemption to be limited in scope and would facilitate trading only of digital representations of the same underlying equity security that an investor could purchase in the secondary market.

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