The CEO of the Securities Industry and Financial Markets Association (SIFMA) has written to the Securities and Exchange Commission (SEC) expressing concerns relating to tokenized securities. SIFMA members have read press reports implying that digital asset firms might receive SEC no action letters or exemptive orders for trading tokenized traditional securities on digital asset platforms. In other words, the digital asset firms won’t have to comply with the same securities rules that SIFMA members adhere to.
Given this could have far reaching consequences for capital markets, SIFMA would prefer to see the process follow the SEC rulemaking process “which allows for public notice and comment, oversight, and broad industry engagement.” SIFMA raised similar issues in a longer letter last month responding to SEC requests for information.
An example given by SIFMA was Coinbase looking to trade tokenized securities in the United States. In the past week there has been a flurry of activity on this front, mainly US digital asset brands launching tokenized securities in Europe. This includes Robinhood, Kraken and Gemini. Last week crowdfunding platform Republic announced US-based “mirror tokens”. The company plans to acquire INX, a licensed alternative trading system (ATS) to support trading. While Coinbase owns a FINRA registered broker-dealer, it does not own an ATS. Yet. Coinbase’s moves appear to align with thinking at the SEC.
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