SEC Postpones Token Stock Innovation Exemption Amid Concerns: Bloomberg

The Securities and Exchange Commission has backed away from plans to issue a broad exemption allowing US cryptocurrency companies to trade token stocks and other token assets, Bloomberg reported Friday. The move slows high-profile efforts to integrate blockchain into major stock markets.

Agency staff were preparing to issue the so-called innovation exemption as soon as this week, according to people familiar with the matter who spoke on condition of anonymity. But the timeline changed as the SEC absorbed comments from exchange officials and other market participants who held discussions with agency staff in recent days.

A central sticking point is a provision that allows trading in third-party tokens — digital representations of company shares issued without the knowledge or consent of the underlying companies.

This possibility has alarmed some previous regulators and market experts. Bloomberg “It could create thorny problems for public companies trying to manage dividends and count shareholder votes as tokens spread across networks,” he said, warning that it could create thorny problems for public companies trying to manage dividends and count shareholder votes.

SEC Chairman Paul Atkins had previously indicated that the agency would soon launch its proposed innovation exemption that could serve as a regulatory sandbox for on-chain stocks. The delay affects companies preparing to launch tokenized asset projects within the expected framework.

Amid criticism of the late relief, SEC Commissioner Hester Peirce defended the proposal’s narrow focus.

The framework was “limited in scope and would only facilitate trading of digital representations of the same underlying securities that an investor could purchase in the secondary market today, not the synthetic securities market,” Pearce said. Written on X. She added that she appreciated the public interest in the base, but not the hype surrounding it.