The Securities and Exchange Commission has launched a five-year trading exemption for blockchain-based U.S. stock trading, effective September 17, 2025, and expiring on September 17, 2031. As reported by crypto.news, the order allows qualifying venues to use permissioned automated market makers and liquidity pools to trade tokenized versions of certain U.S. listed stocks, subject to limits and conditions. OKX US CEO Roshan Robert emphasizes that tokenized stocks must preserve the same rights and privileges as traditional shareholders, stating that changing the technology used to trade and settle a share should not change the investor's claim on the company. The exemption covers secondary trading but does not permit venues to conduct initial share offerings under the order.
Securitize (SECZ) shares jumped more than 15% Friday, extending a sharp recovery just as the U.S. Securities and Exchange Commission opened a new legal pathway for tokenized stock trading. The company, which builds infrastructure for real-world asset tokenization and serves as transfer agent for BlackRock's tokenized BUIDL fund, traded at $16.53. Shares are up 77% over the past five trading days and 158% over the past month, with the company's six-month, year-to-date, and one-year returns all sitting near 50%. According to reports, regulatory clarity removes one obstacle for tokenization platforms, though it does not guarantee investor demand for a business still working toward consistent profitability.
According to reports from crypto.news, Prometheum has detailed how international investors would hold, redeem, and receive legal protection for tokenized US stocks under a proposed distribution arrangement involving HashKey and Velocity Capital. The proposed structure would operate through the indirect holding system established under Article 8 of the Uniform Commercial Code, rather than making each tokenholder the registered shareholder on a company's official books. Cede & Co., the nominee used by the Depository Trust Company, would remain the registered owner of the underlying shares, with tokenization not changing this existing arrangement used for nearly all publicly traded US equities held through brokerage accounts.
Under the SEC's new exemption, a venue must verify that each tokenized stock provides the rights and privileges of an equivalent class of conventional stock, covering investor's interest in the company, dividends, voting rights, and a claim on remaining assets if the company is liquidated. As reported by crypto.news, the SEC identifies that a product providing only synthetic exposure to a share's price does not qualify as tokenized NMS stock under the exemption. Issuers get 30 days to object to third-party tokenization of their stock, with the venue required to give written notice before trading begins. If a company objects within that period, the venue cannot offer the tokenized stock under this exemption, with the process applying specifically to shares tokenized by unaffiliated parties rather than every tokenized share.
The SEC's five-year exemption provides conditional relief to certain firms supplying tokenized shares to approved liquidity pools while requiring operational records and disclosures. As reported by crypto.news, venues must use public, auditable smart contracts on public blockchains, stop trading tokenized stocks when the primary exchange halts its underlying share, and maintain fair access, protection against front-running and manipulation. SEC Chair Paul Atkins framed the exemption as a temporary bridge, stating "in a permissioned environment today while the commission considers the need for additional action to facilitate onchain trading." The commission has requested public comments on the order, including how tokenized trading might affect pricing and liquidity in underlying stock markets, with evidence from the five-year period potentially informing permanent regulatory changes.
