SEC Chair Paul Atkins Announces Innovation Exemption for Tokenized Securities Trading

US Securities and Exchange Commission Chair Paul Atkins said the agency is nearing the release of an exemption that would allow market participants to trade tokenized securities onchain within a compliant framework. Speaking at the Economic Club of Washington on Tuesday, Atkins said the SEC is close to introducing what he described as an exemption aimed at enabling limited activity in tokenized markets while the agency develops longer-term rules. “We are on the cusp of releasing what I call an ‘innovation exemption,’ which will provide market participants with a cabined framework to begin facilitating the trading of tokenized securities onchain in a compliant fashion as the Commission works toward long-term rules of the road,” he said. The exemption would provide a structured pathway for companies seeking to facilitate trading of blockchain-based securities, an area that has remained constrained in the US due to the absence of clear frameworks. The innovation exemption has been under discussion at the SEC for months as part of efforts to accommodate tokenized securities and blockchain-based markets. In July 2025, Atkins said the agency was considering targeted relief to support tokenization and new trading methods. In March, Commissioner Hester Peirce said staff were still developing the exemption as a way to allow limited experimentation with tokenized securities while assessing how existing securities laws apply to onchain markets. The comments build on the SEC’s recent efforts to clarify how digital assets are treated under federal securities laws. On March 17, the agency issued interpretive guidance outlining a token taxonomy that groups digital assets into categories such as digital commodities, collectibles, tools and stablecoins, with only tokenized securities falling under its core jurisdiction. The interpretation was positioned as a bridge ahead of potential market structure legislation and aimed to provide clearer lines between the SEC and the Commodity Futures Trading Commission. In his speech, Atkins described the taxonomy as “long overdue,” framing it as a step toward clearer rules for digital assets. On March 24, the SEC sent the proposed interpretation to the White House for review, marking a further step toward formalizing its approach to crypto classification and oversight. As of Wednesday, government records showed the proposal as still “pending review” by the White House.