WFE Raises Concerns Over SEC's Plan for Tokenized Stocks

According to PANews, the World Federation of Exchanges (WFE), an international non-profit organization representing major global securities exchanges, has expressed concerns over the U.S. Securities and Exchange Commission's (SEC) proposal to allow cryptocurrency companies to sell 'tokenized' stocks without regulatory oversight. This plan, outlined in a letter to the SEC this week, could potentially harm investor interests. Several cryptocurrency companies are planning to sell crypto tokens linked to listed stocks. However, to sell such products in the U.S., crypto companies not registered as broker-dealers must obtain a no-action letter or exemption from the SEC. SEC Chairman Paul Atkins has stated that the agency is working on an 'innovation exemption' clause in securities law to enable crypto firms to explore new business models. The WFE's letter highlighted that such exemptions might pose risks to market integrity and weaken investor protection. WFE CEO Nandini Sukumar emphasized, "The SEC should avoid granting exemptions to companies attempting to bypass regulatory principles that have protected markets for decades." While the SEC has published the WFE's letter on its website, it has declined to comment. James Auliffe, head of the WFE's technical working group, remarked, "We and cryptocurrency platforms should compete on a level playing field and be subject to the same rules."