SEC Delays Tokenization Exemption as CLARITY Act Negotiations Drag On

The Securities and Exchange Commission (SEC) has delayed its tokenization innovation exemption for the second time, citing ongoing negotiations over the CLARITY Act's tokenization provisions in Congress.

The holdup is tied to Section 10505 of the bill, which governs how tokenized securities are regulated. The SEC had previously signaled that it was close to releasing the exemption as part of its Project Crypto initiative.

As a result, both the tokenization exemption and a proposed vote on crypto startup exemptions have been put on hold until the Senate's September 15 procedural vote provides a clearer signal on the CLARITY Act's prospects. The bill would create the first comprehensive federal framework for digital assets, splitting oversight between the SEC and the Commodity Futures Trading Commission (CFTC).