The Securities and Exchange Commission has postponed plans to grant broad exemptions to U.S. virtual currency companies seeking to trade tokenized assets tied to stocks, Bloomberg Law reported Friday.
SEC staff is preparing to announce a so-called innovation exemption for tokenized stocks as early as this week, with a draft draft already being prepared and considered internally.
The timing was subsequently postponed after regulators took into account feedback from stock exchange officials and other market participants, the report said.
This framework would have provided a clear path for crypto companies to offer blockchain-based publicly traded securities under a lighter regulatory structure.
Bloomberg previously reported that the plan could allow tokens tracking publicly traded companies to be traded on decentralized crypto platforms without the backing or consent of the companies whose shares reference them.
This delay highlights the tension between the SEC’s cryptocurrency policy and the existing stock market structure. Chairman Paul Atkins supported an innovation exemption that would allow both traditional financial firms and crypto-native platforms to experiment with tokenized securities, including trading through automated market makers and other on-chain systems.
Atkins said such exemptions could include quantity limits, a temporary relaxation of some rules, and a whitelisting process for buyers and sellers while the agency develops long-term rules.
The SEC has already begun laying the legal foundations for tokenized securities. The agency division said in January that tokenized securities remain securities under federal law, whether they are issued directly by a company, proxied through a third-party custodial structure, or offered as synthetic exposure through linked securities or security-based swaps.
The agency also warned that third-party tokenization products may not offer holders the same rights and protections as the underlying shares.
Traditional market operators have been positioning for the same changes. DTCC is planning limited live trading of tokenized assets ahead of a broader launch, and Nasdaq and ICE are also moving forward with efforts in tokenized securities.
While the SEC approved Nasdaq’s tokenized securities plan in March, ICE has been pursuing tokenized stocks and crypto-linked products through OKX-related partnerships.
At the same time, exchange officials are urging regulators to avoid giving crypto platforms shortcuts to circumvent market rules. A global federation of exchanges previously urged the SEC to prevent cryptocurrency companies from circumventing rules when offering tokenized stock, warning that exemptions could weaken investor protections and market integrity.
The agency took small steps toward tokenization this year. In February, the SEC granted WisdomTree relief allowing intraday trading of tokenized shares of the Treasury Money Market Digital Fund.
$HYPE Hyperliquid already supports equity-linked markets through its Perps platform, so it was one of the first tokens to soar when the SEC’s tokenization equity plan was announced earlier this week. Delay reverses the momentum; $HYPE It fell more than 10% below $50, but has recovered to nearly $55 at the time of writing.
