The Securities Industry and Financial Markets Association (SIFMA) has asked the U.S. Securities and Exchange Commission (SEC) to reject requests from cryptocurrency companies seeking special permission to offer tokenized stocks.
In a letter to the SEC’s Crypto Task Force, SIFMA argued that crypto firms should follow standard regulatory procedures instead of receiving exemptions.
Tokenized stocks are digital versions of traditional equities, allowing investors to trade shares of companies like Apple or Microsoft using blockchain technology. Some crypto exchanges, including Kraken, have already launched such products, but they remain unavailable in the U.S., Canada, and Europe due to regulatory concerns.
SIFMA, which represents major Wall Street firms, warned that granting no-action or exemptive relief could let crypto platforms operate outside existing securities laws.
No-action relief would protect firms from SEC enforcement, while exemptive relief would allow temporary testing of unregulated products. The group insists these decisions should go through a full public review process rather than expedited approvals.
Crypto Push for Tokenized Stocks vs. Wall Street Resistance
Crypto exchanges like Coinbase and Kraken have been pushing for tokenized stock offerings, arguing that blockchain can make trading faster and more accessible. However, traditional financial firms see the move as a threat to established markets.
Recently, Robinhood Markets has introduced tokenized U.S. stocks and ETFs for European investors, which marks a major expansion of its crypto-based trading services.
Alexander Grieve of Paradigm, a crypto venture firm, suggested that SIFMA’s opposition stems from a desire to protect traditional brokers. He compared the situation to banks resisting stablecoins—digital assets pegged to fiat currencies, which compete with conventional banking products.
SEC Commissioner Hester Peirce, who leads the Crypto Task Force, has hinted at openness to exemptive orders for blockchain-based securities. She noted that standard registration rules may be too costly for some firms. But SIFMA insists that any major changes should involve public input to ensure investor protections remain strong.
The debate highlights growing tension between crypto innovation and financial regulation. Bill Hughes of Consensys called the situation a “regulatory policy mess,” with assets existing in both traditional and crypto markets under different rules.
Meanwhile, reports suggest the SEC is working on universal standards for crypto ETFs, which could speed up approvals. But for now, SIFMA’s letter makes it clear that Wall Street isn’t ready to let crypto firms rewrite the rules without a fight.
The SEC has not yet responded publicly to SIFMA’s request. The outcome could shape whether tokenized stocks gain mainstream acceptance or remain stuck in regulatory limbo. The letter comes after SEC Chairman Paul Atkins called tokenization a key innovation and suggested that the SEC should focus on the advancement of tokenized stocks in the stock market.
Also Read: SEC Chair Urges Push for Tokenization in Stock Market
