The SEC Steps In to Ease Crypto’s Path After Big Legislative Loss

Key Takeaways

• The SEC on Thursday rolled out a temporary exemption of existing securities laws that facilitates trading of tokenized stocks.

• The move follows Congress’ failure to advance the Clarity Act for crypto regulation.

Federal agencies are stepping up their support for digital assets after a major disappointment for the cryptocurrency industry in Congress earlier this week.

The Securities and Exchange Commission on Thursday handed the industry what is effectively a hall pass, in the form of a five-year conditional exemption of existing securities laws, that facilitates trading of tokenized stocks, or digital representations of public companies’ shares that can move on blockchains. Versions of this exist today, via Robinhood and others, though the vast majority are synthetic or derivative-based investment products and are circulated outside of the U.S.

The federal agency’s signal that it’s working to clear the regulatory path for crypto arrived swiftly—just 48 hours after the Clarity Act, a broad framework for digital assets, suffered a near-death blow to passage on Tuesday when the bill failed to garner enough votes to pass through Senate’s cloture vote, a procedural motion that could’ve moved it to a floor vote.