CMC News

#Tokenized Stock Exemptions Face Pushback From Major #Exchange Group

The World Federation of Exchanges urged the SEC to reject broad regulatory relief for crypto companies launching tokenized stock offerings in a Nov. 21 letter. The group expressed alarm at the number of brokers and #crypto trading platforms offering or planning to offer tokenized U.S. stocks.

These products are marketed as stock tokens or equivalent to stocks when they are not, the WFE stated. The development poses multiple and interconnected risks to investors and market integrity.

Crypto exchanges seek to offer tokenized stocks in the U.S., allowing investors to buy exposure to public companies without owning shares. The products feature faster settlements compared to traditional stock exchanges and can be traded at any time, not just during market hours.

#SEC chair Paul Atkins has floated granting an exemption for crypto companies that are not SEC-registered broker-dealers. The WFE, which counts Cboe and Nasdaq as members, said it supports the SEC using exemptive relief but expressed concern that broad use of such relief presents risks.