SEC Delays Tokenized Stock Trading Proposal Amid Pushback; Crypto Exchanges Slide

• SEC Chair Hester Peirce indicated the exemption would be 'limited in scope' and facilitate trading only of digital representations of underlying equity securities already available in secondary markets
• The proposal includes controversial 'third-party tokens' that could be issued without backing or consent from the public companies involved, which sources say would not receive full SEC support
• Crypto exchange stocks declined on the news, with Coinbase falling 4.4% Friday and extending its 2026 loss to 18%, while other platforms like Bullish and Gemini also slid over 2%

SEC Delays Tokenized Stock Trading Proposal; Crypto Exchanges Decline

The Securities and Exchange Commission has postponed its planned "innovation exemption" proposal that would have allowed U.S. crypto firms to trade tokenized assets linked to stocks, according to Bloomberg sources. The SEC delayed the rollout to consider feedback from stock-exchange officials and market participants.

Key Proposal Details:

The draft proposal would have permitted platforms to offer tokenized stocks, provided they guarantee investors the same rights as regular shareholders. Notably, the plan included provisions for "third-party tokens" issued without backing or consent from the underlying public companies—a provision expected to face internal SEC opposition.

SEC Chair Hester Peirce stated Thursday that she expects the exemption to be "limited in scope" and would only facilitate trading of digital representations of equity securities already available in secondary markets.

Market Impact:

Cryptocurrency-related stocks posted mixed performance Friday. Exchange and stablecoin issuers declined:

• Coinbase (COIN) fell 4.4%, extending its 2026 losses to 18%
• Strategy (MSTR) dropped 3%, though up 5% year-to-date
• Bullish and Gemini Space Station each declined over 2%
• Circle Internet lost 1.5%

Bitcoin miners and AI infrastructure providers gained ground:

• HIVE Digital surged 5.7%, up nearly 58% year-to-date
• Keel Infrastructure rose 3.74%
• MARA Holdings and Cipher Digital climbed approximately 2%

The delay signals continued regulatory uncertainty for cryptocurrency markets as the SEC balances innovation with investor protection concerns.