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The Securities and Exchange Commission has delayed a plan that would let crypto firms trade tokenized versions of US stocks. The pause came after stock exchange officials and other market participants raised questions with agency staff.
The proposal was expected to create a path for blockchain-based stock tokens linked to listed companies. However, concerns over shareholder rights, market controls, and overseas access have slowed the release.
SEC staff had prepared and reviewed a draft plan that could have been released this week, according to people familiar with the matter. The plan would provide broad exemptions for US crypto firms that want to offer tokenized assets tied to stocks.
However, the timing changed after the agency received input from stock exchange officials and other market players. The SEC has not made a final decision to change the draft, but the review has delayed the release.
One concern centers on third-party tokens. These tokens could represent public company shares without the backing or consent of the companies involved. That issue has raised doubts among trading firms, former regulators, and public market experts.
Under the SEC proposal, platforms offering tokenized stocks would need to ensure investors receive the same rights as regular shareholders. These rights include dividends and voting rights.
Several former regulators said that the goal may be hard to meet on blockchain networks. Tokens can move between wallets that do not always reveal the owner’s full identity. That could make dividend payments and vote counting harder for public companies.
Amanda Fischer, policy director at Better Markets and a former senior SEC official, said corporate leaders may worry about the plan. Her concern focused on how companies would manage normal shareholder duties if tokens spread across crypto platforms.
SEC Commissioner Hester Peirce addressed the debate in a post on X. She said she expects the innovation exemption to be “limited in scope” and would support trading only digital versions of the same equity security available in the secondary market.
Peirce said the framework would not cover synthetic products. Her comments came as market participants questioned whether the plan would allow tokenized instruments that differ from ordinary public shares.
Not all SEC officials support third-party tokens, according to people familiar with the matter. The split inside the agency adds another layer to the delay.
Former banker and NYU Stern professor Austin Campbell warned that tokenized securities could land on platforms with weak know-your-customer controls. He said, “You can’t pay a dividend when you don’t know who owns the token, because it might be the North Koreans.”
His warning focused on the risk that sanctioned groups overseas could gain exposure through gaps in blockchain-based trading systems. Regulators and exchanges have raised concerns about custody and investor protection.
Bloomberg Intelligence analyst Larry Tabb said tokenization can speed settlement and help investors manage cash and collateral. Yet Themis Trading partner Joe Saluzzi said client demand remains limited. “Nobody is asking for this,” he said.
The delay leaves crypto firms waiting for clearer SEC rules on tokenized stocks. It also slows a plan that many firms had viewed as a bridge between traditional equities and blockchain markets.
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