Bitcoin and the broader cryptocurrency market suffered a sharp decline on Friday evening after the U.S. Securities and Exchange Commission (SEC) postponed its planned "innovation exemption" for tokenized stocks. Bitcoin fell to roughly $75,834, wiping out about $33.8 billion in market capitalization, while Ethereum slipped to around $2,000 with losses of approximately $8.58 billion.
According to Bloomberg, SEC staff had prepared a draft framework and was ready to release it as early as this week. The timeline was pushed back following intensive discussions with stock-exchange executives. A major sticking point is the proposal's openness to trading "third-party tokens"—tokens issued without the explicit consent of the companies whose shares they represent. The SEC has not yet made a decision to alter the draft, but the delay alone triggered the market sell-off.
Under the proposal, crypto platforms offering tokenized stocks would have to ensure token holders receive the same rights as traditional shareholders, including dividends and voting rights. Former regulators warn that it remains unclear how issuers would technically meet these requirements on pseudonymous blockchain networks. Pro-crypto Commissioner Hester Peirce posted on X that she expects the final exemption to be "limited in scope," strictly covering digital representations of real secondary-market equities, not synthetic products. The SEC is now expected to adjust the framework to better balance innovation and investor protection.
