SEC Grants Five-Year Exemption for Tokenized Stock Trading on Blockchain Venues, Just Days After Clarity Act Fails in Senate

The Securities and Exchange Commission announced Thursday it will allow blockchain-based trading venues to list and trade tokenized versions of publicly traded U.S. stocks without registering as national securities exchanges. The exemption grants so-called "tokenized securities venues" a five-year conditional exemption from the Exchange Act's definition of an exchange, letting them use automated market makers and liquidity pools to facilitate trades.

Certain liquidity providers operating on these venues will also be exempt from dealer registration requirements.

The timing is unmistakable. Two days after the Senate failed to advance the Clarity Act, the comprehensive crypto market-structure bill, the SEC delivered the relief the industry had been waiting for through other means. The Clarity Act failed to survive a 49-50 procedural vote on Tuesday, falling well short of the 60 votes required to advance.

SEC Chair Paul Atkins had telegraphed the move the day before. "I have been unequivocal: with or without legislation, we will act decisively within the SEC's statutory authority to deliver certainty for American investors and for the entrepreneurs shaping our technological future," Atkins wrote on X, adding "stay tuned."