Exchanges Warn SEC on Crypto Push for Tokenised Stock Sales

The debate over tokenised equities has intensified in Washington after a group of major global stock exchanges urged the U.S. Securities and Exchange Commission to rethink its plan to offer regulatory relief to crypto companies. The warning comes as several digital-asset platforms prepare to launch crypto tokens linked to publicly traded stocks for American retail investors.

These crypto firms, many of which are not registered as broker-dealers, are seeking either a no-action letter or a special regulatory exemption to operate legally in the United States. The SEC has signaled that it is exploring a new “innovation exemption” designed to give emerging financial technologies more room to test unconventional business models.

A letter sent on November 21 by the World Federation of Exchanges (WFE) — whose members include Nasdaq and Deutsche Boerse — marks one of the strongest reactions yet from established market operators. The WFE cautioned that bypassing long-standing securities rules could expose investors to unnecessary risks and disrupt the structure that supports traditional equity trading.

Tokenised stocks function by issuing a crypto token pegged to an existing listed share, giving users stock-like exposure without direct ownership. While some crypto firms argue this approach could modernise markets and increase trading efficiency, mainstream exchanges remain unconvinced. The WFE noted that although tokenisation is a “natural evolution,” it must not compromise market stability or dilute regulatory safeguards that have protected investors for decades.

Under the current U.S. administration, the SEC has shifted toward a more open stance on digital assets, a move that has energised the crypto industry’s lobbying efforts. Major banks and financial institutions are also exploring blockchain-based trading models, heightening competition between traditional exchanges and new-age crypto platforms.

For now, the WFE’s message adds a clear counterweight to the crypto sector’s push for wider access to U.S. markets. As regulatory discussions continue, the future of tokenised equities in the United States remains uncertain — and closely watched across both traditional and digital financial sectors.