Hey, it’s Marc,
The SEC is about to legalize the most disruptive shareholder-rights workaround in nine decades. This week, SEC Chair Paul Atkins is expected to release the agency’s Innovation Exemption, a 12-to-36-month sandbox that lets tokenized US stocks trade on public blockchains and DeFi venues, with the issuing company’s consent expressly not required.
Let’s unpack.
The Signal: This looks like an attempt to regulate an offshore market ($25B in xStocks’s transaction volume is on Solana and other public chains with 100 listed equities). Nasdaq, NYSE and DTCC already won approval to put equities on-chain. The Innovation Exemption is the SEC’s bet that DeFi-native venues stay onshore, instead of jurisdictions like UAE or Singapore.
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What happened
On May 18, Bloomberg reported that the SEC is preparing to release its long-signaled Innovation Exemption for tokenized securities. The framework allows digital tokens linked to public-company shares, including tokens issued by third parties without the underlying company’s consent, to trade on decentralized platforms and automated market makers under lighter-touch registration. [NEWS]
The agency is targeting issuance on or around May 18, 2026, with full guardrails: KYC/AML, verified-buyer whitelists, exposure limits, and disclosure requirements during the sandbox window.
Zooming in: Tokenised stock is moving rapidly. Nasdaq won SEC approval for its tokenized-share order book on March 18, 2026. NYSE is building a separate 24/7 venue with BNY Mellon and Citi for tokenized deposit and stablecoin settlement. DTCC, which custodies over $114T in assets, is scheduled to begin limited production trades of tokenized stocks and ETFs in July 2026, with full platform launch in October.
The state of market: Tokenized equity value grew from $350M in mid-2025 to $1.43B by May 2026. The leading platforms include Ondo, xStocks, Securitize, WisdomTree and Superstate.
Kraken acquired Backed Finance (issuer of xStocks) in December 2025, capturing an AUM of $400M. But, tokenised stocks are not available to US persons due to US securities regulations. The day the exemption goes live, that wall comes down.
Why it matters
Issuer consent dies as the bedrock of US equity markets. The 1933 Securities Act gave public companies veto power over where their stock trades. The Innovation Exemption removes it. Backed Finance can wrap AAPL, NVDA, or TSLA, sell SPL-token versions on Solana, and Apple has no recourse. The token settles against shares Backed holds in a regulated brokerage account. Shareholder rights route through Broadridge’s ProxyVote platform, with Superstate and Ondo already passing through votes and dividends. Anthropic learned this last week. It publicly disowned tokenized versions of its stock and could do nothing to remove them. Every blue-chip name on a US exchange will face the same problem.
