Core Summary

The U.S. Securities and Exchange Commission on September 17 formally released its long-awaited “innovation exemption” rule, granting a five-year registration waiver to tokenized securities trading venues, allowing them to operate legally without applying to become national securities exchanges. The move represents a substantive response by U.S. securities regulators to crypto industry demands and a proactive initiative by regulators amid congressional inaction on crypto legislation.

Event Details

According to reporting by The Block and CoinDesk, the SEC’s “innovation exemption” is a blanket regulatory waiver with broad scope. Documents show that any qualified tokenized securities trading venue can operate during the five-year validity period without completing the cumbersome registration procedures required of traditional stock exchanges. This design significantly lowers compliance barriers and provides valuable trial-and-error space for emerging financial infrastructure.

The direct background of this rule is the Senate’s failure to advance crypto market structure legislation. With bipartisan gridlock on crypto regulatory issues, regulators decided to break the impasse through administrative means first. The SEC positioned the measure as a key step toward “bringing America’s capital markets into the tokenized era.”

Industry reaction has been broadly welcoming. Crypto.com registered with the SEC on the same day, preparing to launch single-stock futures products. CEO Kris Marszalek said the company is working with the SEC and CFTC to offer single-stock perpetual futures contracts in the U.S. market.

Notably, S&P Global Ratings announced its acquisition of blockchain security firm OpenZeppelin, further strengthening its footprint in tokenized finance risk management. OpenZeppelin will continue operating as a standalone business unit, with financial terms undisclosed.

Panoramic Perspective

The release of the “innovation exemption” marks an important shift in U.S. crypto regulatory paradigm. Over the past few years, regulators tended to define compliance boundaries through enforcement actions rather than proactively providing rule guidance. This “punishment-based regulation” approach forced many crypto enterprises to relocate to jurisdictions with more crypto-friendly regulation such as Singapore and the UAE.

This exemption rule reflects three underlying logics: first, regulators acknowledge that tokenized securities represent an irreversible technological evolution trend, and proactive guidance is preferable to passive response; second, regulators are seeking policy initiative amid congressional deadlock, aiming to avoid losing their ability to shape the crypto industry before the 2028 election cycle; third, the tokenization transformation of traditional financial infrastructure requires regulatory sandboxes rather than direct application of last century’s securities law framework.

From a geopolitical competition standpoint, this rule is expected to reverse the United States’ relative lag in tokenized finance. The EU has seized initiative through MiCA legislation, while Switzerland and Singapore have each established clear tokenized securities regulatory frameworks. The U.S. “innovation exemption” has time limits, but the signal released is one of embracing rather than excluding innovation.

S&P Global’s acquisition of OpenZeppelin reflects that traditional financial infrastructure providers are accelerating their deployment in the on-chain asset ecosystem. The large-scale entry of rating agencies, insurance providers, and custodian banks will facilitate smoother institutional capital flows into tokenized asset sectors.

Multiple Perspectives

Views Supporting the Exemption Rule:

  • The crypto industry broadly views this as an important signal of U.S. regulators shifting toward pragmatism, providing legal certainty for tokenization innovation
  • Some traditional financial institutions welcome the framework, believing tokenization can enhance securities settlement efficiency
  • Certain policy researchers consider regulatory sandboxes as effective tools for balancing innovation and risk

Reservations:

  • Consumer protection organizations worry about insufficient investor protection mechanisms during the five-year exemption period
  • Some congressional members criticize regulators for overreach, arguing major policy decisions should be made by the legislature
  • Certain traditional securities practitioners fear the exemption rule creates regulatory arbitrage opportunities

Long-Term Impact Assessment:

  • Market observers predict that upon exemption expiry, more comprehensive tokenized securities legal frameworks may emerge
  • Industry experts believe this move will accelerate technological upgrades at traditional stock exchanges
  • International regulators are closely watching the U.S. pilot, which may become a reference sample for global regulatory coordination

Editor: GoodInfo Global News Team