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Highlights
- Wintermute share recommendations to the U.S. SEC Crypto Task Force on tokenized securities regulation.
- SEC needs to share guidance on tokenized securities trading, lending on DeFi, and clarify network tokens are not securities.
- Coinbase, Kraken, and other seeks broker-dealer license for offering tokenized stock trading.
Algorithmic crypto trading and market-making firm Wintermute Trading submitted comments to the U.S. Securities and Exchange Commission (SEC) Crypto Task Force regarding the need for tokenized securities regulation. This comes as the SEC seeks to regulate tokenization while companies such as Coinbase, Kraken, and others eye approval for a broker-dealer license.
The SEC calls for industry-wide comments as the regulatory body prepares for tokenization guidance before Dinari and other crypto exchanges start offering related services in the United States.
Wintermute Weighs in on Tokenized Securities with SEC
Wintermute submitted feedback to the SEC‘s Crypto Task Force on tokenized securities, recommending three areas critical for liquidity providers to support the adoption of tokenized securities. The comments came in response to the SEC’s “There Must Be Some Way Out of Here” in support of increased regulatory support for crypto.
The firm asks the SEC to share guidance and rules for crypto brokers and dealers on tokenized securities trading from their accounts. Also, self-custody them with key management and wallet software, and settle tokenized securities on-chain, including with stablecoins and other non-security assets.
Wintermute recommended that the SEC should encourage trading tokenized securities on DeFi, adding tokenized securities to liquidity pools to boost liquidity, and lending tokenized securities directly on DeFi. The firm claimed these activities should not require broker-dealer registration or trigger U.S. jurisdiction.
The firm requested the SEC to clarify that network tokens such as Bitcoin, Ethereum, Solana, XRP, and others are not securities under the Howey Test. As they are critical to decentralized protocols, despite initially distributed in fundraising transactions or traded speculatively.
The firm believes that clear guidance and rules on these will boost RWA tokenization, including tokenized stocks, ETFs, and other traditional financial products.
RWA Tokenization Boost Under Crypto-Friendly SEC
RWA tokenization in the U.S. saw a major boost under the crypto-friendly Trump Administration. The total tokenized RWA market value globally has reached nearly $28 billion, with more than 191.18 million stablecoin holders.
Recently, tokenized stock trading platform Dinari became the first firm to secure a broker-dealer license to offer tokenized securities. Also, Kraken and Coinbase are seeking a broker-dealer license from regulators to offer tokenized securities in the United States.
On September 3, Galaxy Digital became the first company to enable tokenization of its SEC-registered GLXY shares on Solana.
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