The U.S. Securities and Exchange Commission has opened a five-year regulatory pathway for tokenized U.S. stocks to trade on blockchain-native venues, pairing the move with the failure of the CLARITY Act in the Senate. The procedural vote failed 49-50, two votes short of the 60 needed, leaving the crypto industry without a broad market-structure bill and pushing regulators to act under existing authority.
SEC Chair Paul Atkins said the agency was moving 'within its statutory authority' to allow on-chain trading of certain tokenized stocks. The new Innovation Exemption creates Tokenized Securities Venues, or TSVs, which can use permissioned automated market makers and liquidity pools. Qualifying venues get temporary relief from exchange registration, and some liquidity providers can receive related dealer-registration relief. The exemptions expire after five years, giving the SEC time to collect data before drafting permanent rules.
Commissioner Mark Uyeda described the framework as deliberately constrained. It includes symbol and volume caps, transaction transparency rules, trading halts, recordkeeping requirements and technology safeguards. Venues must publish prices, trade sizes, timestamps, pool addresses and daily trading volumes. Eligible tokenized shares must carry the same rights and privileges as conventional shares, including dividend and voting rights, while synthetic price-tracking products are excluded. Issuers can object to third-party tokenization, and venues must be U.S. persons, comply with OFAC rules and restrict participation through permissioned access.
Token Terminal data show the offshore tokenized-stock market reached a record $3.2 billion in market capitalization, up 1,219.3% over the past year. Those products generated $15.75 billion in decentralized-exchange volume over 30 days, including $2.95 billion on weekends. Weekend turnover rose 4.4-fold in three weeks, from $360 million to $1.6 billion per weekend. Token Terminal counted 3.7 million on-chain tokenized-stock holders, up 4,247.8% year over year, while tokenized-stock value deployed in DeFi reached $247.8 million, up 1,960.8%. Grayscale estimated only about 5% of tokenized equity was deployed in on-chain finance, but lending protocols on Solana such as Kamino and Jupiter saw tokenized-equity use increase roughly tenfold over the past year.
Industry participants welcomed the SEC move. Robinhood Crypto General Manager Johann Kerbrat called it 'a major step by the agency' that will allow liquid tokenized securities markets to develop onshore. Robinhood, Kraken and Coinbase already offer tokenized U.S. equity products to overseas customers. Coinbase CEO Brian Armstrong has called for full backing of tokenized equities with real securities, a distinction that also matters for corporate-governance use cases.
Separately, Genius Foundation launched Genius.fun on BNB Chain, a platform that lets crypto communities create tokens, build treasuries with tokenized public-company shares and coordinate shareholder campaigns. Creators can pair tokens with BNB, USDT, USDC or tokenized assets from Ondo, bStocks, xStocks and 4Stocks, with more markets expected through gPerps. Creators may collect up to 1.25% of trading fees, while 0.25% is directed to token buybacks and supply locking. Tokens graduate to PancakeSwap after reaching a 15 BNB threshold.
The launch frames community tokens as capital-formation tools that could pursue board seats, activist campaigns or hostile takeovers. However, Genius Foundation has not announced any target company, and legal rights depend on whether tokenized positions are backed by underlying equity. Any campaign involving a listed U.S. company would still face securities laws, ownership disclosure rules and corporate governance limits. Armaan Kalsi, CEO of Shuttle Labs, said the ability to launch capital formation vehicles and potentially vie for board seats was 'inherently exciting.'
Together, the SEC exemption and the Genius.fun launch highlight tokenization moving beyond simple buying and selling toward programmable collateral, DeFi integration and community ownership experiments. The five-year test remains bounded by trading caps, issuer vetoes and permissioned access, but it creates a regulated onshore path for what has largely been an offshore market.