SEC and CFTC advance onchain trading rules

TLDR

US regulators are moving ahead with onchain trading rules even without new crypto laws from Congress.

1. The SEC has launched a five-year innovation exemption that lets qualifying platforms trade tokenized US stocks onchain under strict conditions.
2. The CFTC has started formal rulemaking for Regulation Crypto Asset Transactions and Markets, plus no-action relief that lets some wallet-style apps offer regulated perps without broker registration.
3. These steps signal real progress toward a regulated onchain market structure, but details, scope, and long term durability will be decided during rulemaking and could still change.

Deep Dive

1. What The SEC Is Allowing Onchain

The SEC introduced a five year innovation exemption for tokenized US equities, allowing Tokenized Securities Venues to support secondary trading of certain National Market System stocks onchain without registering as full exchanges, under tight safeguards. Reports note that:

1. Only real tokenized shares qualify, not synthetic tokens that merely track prices.
2. Platforms must preserve core shareholder rights like dividends and voting, and synchronize trading halts with the underlying stock market.
3. The relief also grants limited dealer registration relief to liquidity providers operating within this framework.

This is framed as a controlled experiment, not blanket approval for all tokenized stocks, and it can be modified or withdrawn after the five year window.

2. What The CFTC Is Doing For Crypto Markets

The CFTC has filed a prerule package titled Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets with the White House Office of Information and Regulatory Affairs, starting a formal path toward a crypto market structure regime under its existing authority. Details are not yet public, but CFTC Chair Michael Selig has said staff are exploring a model where both registered and unregistered exchanges can become CFTC supervised crypto asset markets that support leveraged or margined trading.

In parallel, the CFTC issued broad no action relief for passive software providers, including non custodial wallets, that connect users to registered derivatives venues if they do not custody funds, give trading signals, or control execution. This effectively lets some wallet interfaces offer regulated perpetuals and event contracts without being treated as introducing brokers.

3. Why It Matters And What To Watch Next

These moves follow the Senates failure to advance the CLARITY Act, which would have set a legislated split between SEC and CFTC crypto oversight. Agencies are now filling the gap with exemptions, no action letters, and rulemaking that are easier to adjust than laws but also less permanent.

Key watchpoints for crypto users and builders:

1. Publication of the CFTC rule text, which will reveal which assets, venues, and transaction types fall under the new regime.
2. How the SECs tokenized stock experiment scales in terms of liquidity, investor protections, and the willingness of major issuers and broker dealers to participate.
3. Whether Congress eventually revives comprehensive legislation that could override or reshape these agency built frameworks.

Conclusion

The SEC and CFTC are using existing powers to push forward onchain trading rules for tokenized stocks and crypto derivatives, even as legislative efforts stall. If these frameworks survive the rulemaking process and attract major venues, they could normalize 24/7, regulated onchain markets while keeping a strict line between compliant platforms and everything else.