TLDR Tech / Crypto
SEC's Tokenized Equities Exemption: Why Every Existing Platform Fails to Qualify
The SEC's Exemptive Relief letter for Tokenized Securities restricts trading to permissioned AMM venues (TSVs) where both LPs and traders must complete KYC/KYB, excluding CLOB-based platforms like Hyperliquid, which market makers prefer for capital efficiency. Only SEC-registered tokenized NMS stocks qualify, disqualifying every existing permissionless tokenized equity offering from Robinhood Crypto, Coinbase, Binance, Ondo, and xStocks. Volume is capped at 0.25% of a stock's prior-month average daily share volume, while the total tokenized equity market sits at $3 billion against a $70 trillion total market, with current platforms operating below 0.001% of real equity volume. Operators must consent to open-ended SEC examinations and provide 30 days' advance notice before going live, and TSV investors forfeit Reg NMS best-execution protections that apply on traditional exchanges.
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