SEC Opens Door to Tokenized Stock Trading With New Five-Year Exemption

The US Securities and Exchange Commission (SEC) issued a conditional exemption on Thursday (September 17) that allows tokenized versions of US-listed stocks to trade on blockchain-based venues without those venues registering as national securities exchanges.

The measure, dubbed the “Innovation Exemption,” runs for up to five years, the agency framing it as a temporary bridge to permanent rulemaking rather than a final rule.

What the Clarity Act would have done

The move swiftly followed the collapse of the Digital Asset Market Clarity Act in the Senate. A cloture vote on the bill fell short on September 15, with senators voting 49 to 50, 11 votes shy of the 60 needed to advance.

The Clarity Act would have assigned crypto regulatory authority across agencies, including new powers for the Commodity Futures Trading Commission (CFTC) over crypto spot markets. As it currently stands, the CFTC’s reach is limited to anti-fraud and anti-manipulation enforcement on derivatives; the agency has no authority to register or oversee crypto spot trading.

The bill would have given the CFTC exclusive federal jurisdiction over spot-market trading in tokens that qualify as digital commodities, and created three new registration categories: