SEC clears path for tokenized stocks, bringing the market closer to 24/7 trading — SkimNews
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- SEC issued the Innovation Exemption order effective Thursday, creating a five-year regulatory pathway for trading platforms and liquidity providers to facilitate tokenized stock trading.
- The exemption requires token holders to retain the same rights as traditional equity holders — including dividends and voting — and gives companies a 30-day window to object before a tokenized version of their stock can begin trading.
- The SEC move came two days after the Clarity Act, crypto's main market structure bill, failed to advance in the Senate; SEC Chair Paul Atkins framed the exemption as part of "Project Crypto" to bring U.S. capital markets onchain.
- Coinbase, Robinhood, Gemini, and Kraken have launched offshore tokenized equity offerings but have yet to offer them to U.S. customers; the new exemption could let those products come onshore.
- Robinhood said this week it will let stock-token holders redeem tokens 1:1 for underlying shares and add voting rights — a concession that follows a public fight with AMC CEO Adam Aron over tokenized stock rights.
- The exemption includes volume limits designed to mitigate increased volatility and exposure to large price swings when trading activity is thinner.
Why it matters: This gives major crypto platforms — Coinbase, Robinhood, Gemini, and Kraken — a regulatory on-ramp to bring offshore tokenized equity products to U.S. customers, potentially enabling 24/7 stock trading. The 30-day issuer objection window and mandatory voting/dividend rights are a direct response to the AMC-Robinhood dispute, meaning companies now hold a kill switch over tokenization of their shares while the SEC gathers five years of market data before drafting permanent rules.
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