The Securities and Exchange Commission is preparing to release an “innovation exemption” that would allow blockchain-based platforms to offer trading in tokenized versions of publicly traded US stocks without requiring full broker-dealer registration, Bloomberg reported, citing people familiar with the matter.
SEC Chair Paul Atkins has been driving the push under a broader agency initiative he calls “Project Crypto.” He previewed the move in an April 21 speech at the Economic Club of Washington, saying the agency was “on the verge of releasing” a framework allowing market participants to trade tokenized securities on-chain in a formally compliant manner for the first time.
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The framework would run as a 12–36 month regulatory sandbox with guardrails including volume caps, disclosure requirements, and periodic reporting obligations.
The SEC is leaning toward permitting tokens linked to public company shares — including tokens issued by third parties without the underlying company’s knowledge or consent — to trade on decentralized crypto platforms. Platforms could offer tokenized exposure to companies like Apple, Amazon, or Nvidia with no issuer involvement.
Critics warn that this creates structural risks. “If third parties can tokenize Apple or Amazon without the issuer at the table, there’s no theoretical limit on how many wrappers of the same company exist at once. This could create a whole new level of market fragmentation and could leave investors less certain what their shares are actually worth at any moment,” said Brett Redfearn, president of tokenization platform Securitize.
Some SEC officials remain internally opposed, and final details are still being negotiated. Commissioner Hester Peirce has played a central role in advancing the exemption. Traditional financial institutions and exchanges pushed back during the comment process, contending the pilot could erode safeguards around custody, anti-money laundering compliance, and retail investor protection. Any exemption issued would not override existing federal securities law — the SEC reiterated in January 2026 guidance that tokenizing a security does not change its legal classification.
The SEC has spent the past several months laying groundwork. It approved Nasdaq’s tokenized equity rules in March 2026, then the NYSE’s equivalent in April. The NYSE subsequently partnered with crypto exchange OKX to build a 24/7 on-chain trading and settlement platform. In December 2025, the SEC authorized the DTCC to tokenize select liquid assets on pre-approved blockchains, with limited production trades planned for July ahead of a broader October launch.
Those approvals all operated within the existing market structure. The innovation exemption would go further, opening on-chain equity trading to crypto-native venues and decentralized finance protocols that sit outside it.
Analysts project the tokenized asset market could reach between $2 trillion and $10 trillion by 2030. Proponents argue the structure would cut settlement times, enable fractional share ownership, lower transaction costs, and allow equity trading outside of traditional market hours.
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
