U.S. SEC Plans 'Innovation Exemption' for Tokenized Securities

Huo Xing Finance reports that, in a speech marking his first anniversary in office at the Economic Club of Washington, U.S. SEC Chairman Paul Atkins stated that the SEC is advancing reforms to its digital asset regulatory framework under the “A-C-T” strategy—modernizing regulation, clarifying regulatory boundaries, and rebuilding the rule system. Regarding crypto assets, the SEC has released a classification system for crypto tokens, categorizing digital assets into five types, four of which are not securities. He noted that the SEC is preparing to introduce an “innovation exemption” mechanism to provide a limited framework for market participants to conduct tokenized securities transactions on-chain in a compliant manner, and has launched Project Crypto to adapt securities rules and regulatory systems to the trend of capital markets moving on-chain. Additionally, last month the SEC signed a memorandum of understanding (MOU) with the CFTC to harmonize key definitions, clarify regulatory jurisdictions, and coordinate oversight of shared matters, including digital assets. Paul Atkins also remarked that the U.S.’s previous approach to regulating crypto assets had led to innovation migrating overseas.