Key points
- SEC clears a five-year path for tokenized stocks
- Companies get a say over their own stock tokens
- The order lands just after the Clarity Act stalled
The Securities and Exchange Commission will let US trading platforms offer tokenized versions of public stocks for five years, and the company whose stock is being tokenized can still say no. The exemption, issued on Thursday, frees those platforms from many of the rules that apply to the Nasdaq and the New York Stock Exchange.
"The Innovation Exemption is designed to resolve challenges that have prevented responsible innovation from taking root in the United States while providing investor protections and market integrity standards," SEC chair Paul Atkins said in a statement. The order was reported by Reuters and CNBC on September 17.
What the exemption allows
The order grants platforms that trade tokenized stocks a five-year exemption from the definition of an exchange under SEC rules. Those platforms would otherwise face the same requirements as registered exchanges. Liquidity providers in tokenized stocks get a separate five-year exemption from dealer registration requirements.
A stock token has to carry the same rights and privileges as the traditional share, including the right to receive dividends and to vote. "Synthetic" tokens, which give exposure to a stock through a derivative or another product, are not permitted. The exemption also includes volume limits, meant to reduce the risk of large price swings when trading is thin.
Platforms must notify a company before listing a tokenized version of its stock, then wait 30 days after the notice arrives, an SEC spokesperson said. If the company objects inside that window, the venue cannot offer the token.
Why now
The order came two days after the Senate failed to advance the Clarity Act, a crypto market structure bill that would have set rules for how digital assets are classified and regulated. The SEC is now drawing that boundary through its existing authority instead.
The exemption is part of the agency's "Project Crypto" initiative, which it launched in July 2025 to move US financial markets onto blockchain rails. In August, the SEC proposed a framework called Regulation Crypto Assets that would exempt certain crypto companies and offerings from US securities rules, which would make it easier for them to issue tokens and raise money.
Who is ready, and who is exposed
Coinbase (COIN), Robinhood (HOOD), Gemini (GEMI), and Payward's Kraken already offer tokenized equity products outside the United States, but not to US customers. Coinbase has said it plans to launch tokenized stocks in the US once the rules allow. On September 14, Robinhood said one-to-one redemption of its stock tokens for the underlying shares is in development, and that voting rights are on the roadmap.
The voting rights requirement follows a public dispute between Robinhood and AMC Entertainment (AMC). AMC chief executive Adam Aron argued that creating exposure to AMC stock without the company's involvement undermines the relationship between a company and its shareholders. The exemption now lets an issuer block that outcome.
Analysts and attorneys told Reuters the change could eventually put crypto platforms into competition with traditional brokerages. The names they point to are Morgan Stanley's (MS) E*Trade and Charles Schwab (SCHW).
The exemption runs for five years. "This interim measure must be followed by durable rulemaking to ensure that onchain markets remain a viable pathway as our capital markets continue to evolve," Atkins said.
