SEC Unveils Framework for 24/7 Tokenized Security Trading
The US Securities and Exchange Commission (SEC) is preparing to unveil a new exemption that could bring crypto trading closer to traditional stock markets. The agency has scheduled an open meeting for Friday to establish a framework for certain crypto-related investment contracts.
The proposed exemption would allow tokenized securities, essentially digital versions of stocks, to be traded 24/7 on blockchain networks. This flexibility is crucial in today's fast-paced market where news breaks overnight or on weekends, and investors can't wait until the opening bell to trade.
The SEC had initially planned to release the exemption in May but pushed back after receiving feedback from exchanges, public companies, and other stakeholders. The revised proposal may give companies more control over the tokenization of their own stock, including the option to reject third-party listings.
Brett Redfearn, a former SEC director who now leads tokenization firm Securitize, said that the industry has advocated for corporate issuers to remain involved in how their own stock gets tokenized. The new rules are expected to include stricter controls and anti-money-laundering requirements, including a demand that trading platforms be based in the US.
The move comes after a legislative effort stalled due to partisan disagreements over ethics rules for public officials. While the SEC's exemption is seen as a significant step towards integrating traditional finance with digital assets, experts warn that it is not equivalent to legislation and may still leave the industry in a state of legal uncertainty.