WFE Cautions SEC on Risks of Exempting Crypto Firms from Tokenized Stock Rules
The post WFE Cautions SEC on Risks of Exempting Crypto Firms from Tokenized Stock Rules appeared on BitcoinEthereumNews.com.
The SEC is considering a crypto innovation exemption that could let unregistered platforms offer tokenized stocks to U.S. investors without broker-dealer registration. However, the World Federation of Exchanges warns this risks bypassing decades-old market safeguards, potentially exposing retail investors to unprotected assets mimicking equities. WFE urges SEC to enforce existing regulations on tokenized assets to protect investors from unlicensed crypto platforms. The proposal divides traditional finance and crypto sectors, with banks exploring tokenization while exchanges demand oversight. Nasdaq supports regulated tokenized securities, but delays arise over settlement processes through the Depository Trust Company. Discover the SEC crypto innovation exemption debate: WFE opposes exemptions for tokenized stocks, citing investor risks. Explore regulatory challenges in blockchain equities. Stay informed on U.S. market safeguards—read now! What is the SEC Crypto Innovation Exemption? The SEC crypto innovation exemption refers to a potential regulatory carve-out allowing crypto platforms to offer blockchain-based tokens representing exposure to listed stocks without full broker-dealer registration. This approach, under review by SEC Chair Paul Atkins, aims to foster digital asset innovation amid the Trump administration’s recalibrated stance on crypto. However, critics argue it could undermine investor protections established over decades by permitting unregulated entities to enter the equities space. How Does Tokenized Equities Regulation Impact Traditional Markets? Tokenized equities regulation remains a contentious issue, balancing innovation with investor safety. The World Federation of Exchanges (WFE), representing major venues like Nasdaq and Deutsche Boerse, emphasized in a November 21 letter on the SEC’s website that regulators must prevent crypto firms from bypassing core principles. WFE Chief Executive Nandini Sukumar highlighted the dangers of exempting unregistered platforms, noting that such tokens could mimic stock ownership without accompanying safeguards like disclosure requirements or fiduciary duties. This stance echoes broader concerns within the financial industry. In August, the WFE sent similar warnings to U.S.,…
Filed under: News - @ November 27, 2025 5:25 am