SEC Considers Plan to Let Companies Challenge Tokenized Shares

The U.S. Securities and Exchange Commission (SEC) is considering a plan to allow publicly traded companies to challenge tokenized versions of their shares listed on third-party platforms.

The proposed 'innovation exemption' would also restrict stock-token trading platforms to only U.S.-based entities, introducing stricter anti-money laundering (AML) requirements.

Tokenized stocks are digital representations of traditional shares issued on a blockchain, allowing for fractional ownership and faster settlement. However, they raise legal questions about issuer consent, regulatory jurisdiction, and investor protection.