SEC Approves Onchain Stock Trading, Bars Synthetic Tokens
The US Securities and Exchange Commission (SEC) has approved onchain stock trading and barred synthetic tokens from it. The move is seen as a significant step forward in bringing America's capital markets into the digital age, according to SEC Chairman Jay Clayton.
However, not everyone is happy with the decision. Adam Aron, CEO of AMC, called Robinhood's stock tokens 'vile' and 'inexcusable'. He claimed that his company had no connection to the tokenization of its shares.
The conditions for onchain trading include verifying that a token gives holders the same rights and privileges as ordinary shareholders. Venues must also notify companies and allow them to object before listing tokens created by outside firms.
Only approved participants can trade, even though smart contracts run on public blockchains anyone can inspect. Symbol counts and volumes are capped, and onchain trading stops when the listed share halts. The relief expires in five years.