🥛 Crypto gets a hall pass 📝

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CRYPTO GETS A HALL PASS 📝

On Wednesday, the Senate stalled CLARITY, but we told you the regulators won’t sit on the sidelines waiting for the legislators to get their act together.

Yesterday, both the SEC and the CFTC announced measures that set the stage for a rule-based crypto regime.

The SEC issued an innovation exemption that lets tokenized U.S. stocks trade onchain through AMMs, or Automated Market Makers.

Source: @SECGov

An AMM is a pool of assets that prices your trade using code rather than a traditional exchange with market makers. Uniswap, Aerodrome, and Raydium are some examples of this.

Until yesterday, trading a tokenized version of your favorite tech stock on any of the above platforms put you in a regulatory gray zone.

Now it doesn’t.

But there are strings attached to this exemption - for starters:

• The shares have to be the real thing (carry dividends and voting rights), so they can’t be synthetic (ahem… Robinhood).
• Venues have to vet every participant before they’re allowed to trade (aka permissioned, not permissionless).
• Smart contracts must be open and auditable, and live on a public blockchain.
• A company (issuer) can object to its own stock being tokenized (AMC’s CEO had the same argument against Robinhood tokenizing a synthetic version of its stock).
• The initial period of the exemption will be for five years.