TheBlock
The Securities and Exchange Commission has delayed releasing language for its anticipated innovation exemption covering tokenized assets, Bloomberg Law reported Tuesday, citing people familiar with the matter. A draft of the plan had already been written and reviewed by staff, but the agency is now weighing feedback from stock exchange officials and market participants gathered over the past several days.
The friction centers on so-called third-party tokens — tokenized claims that would trade without the backing or consent of the underlying public company. Several former regulators have flagged that it is unclear how a firm can guarantee a token carries the same rights as a regulated share, including dividends and voting entitlements, once the token is moving through permissionless blockchain infrastructure rather than a centralized registry.
Why it matters
SEC Chair Paul Atkins has framed the exemption as a regulatory sandbox for onchain equities and had previously set a deadline of late last year to put it in place. Commissioner Hester Peirce, who leads much of the agency's crypto work, said Thursday on X that she had always expected the exemption to be limited in scope and to facilitate trading only of digital representations of the same underlying equity security a retail investor could already buy in the secondary market — not synthetic instruments that mimic equity performance without conferring direct ownership. The third-party token question is the natural next pressure point: Securitize, Ondo and Superstate have built tokenization rails with integrated SEC-registered transfer-agent functions, but those architectures assume consent from the issuer, which a third-party token by definition lacks.
Market impact
The delay is procedural rather than a reversal, and decisions on the initial draft have not been finalized. The SEC has already authorized the Depository Trust & Clearing Corporation to tokenize certain highly liquid assets on pre-approved blockchains under a three-year window, and the New York Stock Exchange is building its own tokenized equities platform aimed at 24/7 trading.
Frequently asked questions
-
Why did the SEC delay the tokenized asset exemption?
Bloomberg Law reported that staff had a draft written and reviewed, but held further discussions with stock exchange officials and market participants in recent days over concerns around third-party tokens issued without consent from the underlying public company.
-
What is a third-party token in this context?
It is a tokenized claim on a public equity that would trade without the backing or consent of the company whose stock it represents — the structural opposite of issuer-led tokenization offered by firms like Securitize, Ondo and Superstate.
-
What is the innovation exemption supposed to do?
SEC Chair Paul Atkins has described it as a regulatory sandbox for onchain equities, intended to give tokenized assets a clearer legal path under existing securities law.
-
What did Commissioner Hester Peirce say about the scope?
In a Thursday X post, Peirce said she had always expected the exemption to be limited to digital representations of the same underlying equity a retail investor could already buy in the secondary market, and not to synthetic instruments.
-
Is the delay a reversal of the SEC's tokenization push?
No — the delay is procedural rather than a reversal, and the SEC has already authorized DTCC to tokenize certain liquid assets on pre-approved blockchains under a three-year window, while the NYSE builds its own tokenized equities platform.
WatcherGuru
CoinDesk
WuBlockchain
CryptoSlate
CoinTelegraph
Crypto News