Morning Minute: SEC Approves ‘Innovation Exemption’ Moving Tokenized Stocks Forward

Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt. And check out our daily news show ‘FOMO HOUR’ covering all of the top stories and market action.

GM!

Today’s top news:

• Crypto majors are green with HYPE leading, alts soaring; BTC at $78k
• SEC announces innovation exemption for tokenized stocks; alts soar 10-20%
• CFTC issued no-action letter, easing broker rules
• Hyperliquid soared to $90+ and new ATH and introduced protocol lending/borrowing
• Onchain leaders post 10-30% gains following alts

🏛️ The SEC Just Did What the Clarity Act Couldn’t

Two days after the Senate blocked the Clarity Act 49 to 50, the SEC approved an Innovation Exemption letting qualifying venues trade tokenized US stocks on public blockchains without registering as national exchanges. SEC Chair Atkins said that since Congress was unsuccessful, the Commission is taking a significant step within its statutory authority.

Platforms called Tokenized Securities Venues can run tokenized equities through automated market makers and liquidity pools on permissionless chains. Firms providing that liquidity get separate relief from dealer registration. There’s no application queue—a firm that meets the requirements notifies the SEC and starts operating. It took effect immediately and runs five years.

There are two key limitations to be aware of. The exemption covers only real tokenized stocks carrying full rights including dividends and voting, which excludes the price-tracking synthetics that have driven offshore volume. And an unaffiliated party can tokenize a company’s stock, but the issuer gets 30 days to object and effectively stop there shares from being tokenized and traded. So companies do retain some power here.

That second provision lands directly on the fight AMC’s Adam Aron picked two weeks ago when he called Robinhood’s stock tokens contemptible and vile and threatened to involve the SEC. He now has the mechanism he was asking for. Robinhood and Coinbase had already announced redemption and voting rights were coming, which happens to be exactly what the exemption requires.

This came on the same day that S&P Global acquired Open Zeppelin. S&P Global Ratings framed it as bringing trusted data, benchmarks, and transparent risk assessment to markets moving onchain. In practice: if tokenized funds and stablecoins become real institutional instruments, someone has to assess whether the contract holding the assets is sound, not just whether the issuer is.

So the clear takeaway is this—everything in traditional finance is coming onchain. Stocks, commodities, and all other types of assets will become tokenized and traded on blockchains globally, permissionlessly and 24/7. It’s just a matter of time. And this move from the SEC was a huge step forward in making that happen sooner than later…

🌎 Macro Crypto and Markets

• Crypto majors are very green with HYPE leading; BTC +2.2% at $78k; ETH +3% at $2,500; SOL +6% at $106; HYPE +13% at $90.53; ZEC +8% at $1,460
• Top alt movers include UNI (+26%), ARB (+25%) and NEAR (+22%)
• Oil +1% at $101; Gold +0.6% at $4,420
• Stock futures are fairly flat after yesterday’s bounce; DOW -0.05%, Nasdaq +0.3%
• The SEC held a roundtable on 24-hour trading an hour after approving tokenized securities, with Atkins saying tokenization could deliver real-time inventory management
• The CFTC issued a no-action letter letting passive software providers connect users to regulated derivatives without registering as introducing brokers, extending relief first granted to Phantom in March
• S&P Global agreed to acquire OpenZeppelin, the smart contract security firm whose libraries underpin more than $37 trillion in value transferred, in its second digital-asset deal in four days
• NYSE parent ICE is evaluating Avalanche as the settlement layer for an in-development alternative trading system, with ICE’s Michael Blaugrund saying it meets many of the requirements and the teams are closely engaged
• Coinbase partnered with Stablecore to put custody, trading, staking, and stablecoin payments inside community bank and credit union apps, reaching a footprint of more than 3,000 US institutions
• Vitalik Buterin rejected the idea that AI hacking dooms cybersecurity, arguing formal verification favors defenders and noting roughly 90% of his net worth sits in crypto as an implicit bet on that

Corporate Treasuries & ETFs

Meme Coin Tracker

• Meme leaders were green; DOGE +6%, SHIB +7%, PEPE +7%, PENGU +6%, TRUMP +5%, SPX +4%
• Robinhood chain leaders were very green after the SEX exemption; Pons +10% to $480M; AI +30% at $360M; Cashcat +3% at $204M; Boner +35%, Orbio +80%, Index +30% and Moo +35% led top movers
• Solana top movers were led by Paid +30%, Raycat (+40%), MCAT +80% and Tilcayo (+45x); Stonk eco rallied as Stonk +25% to $220M, Purr +47% and Nearkat +120%

💰 Token, Airdrop & Protocol Tracker

🚚 What is happening in NFTs?

• NFT leaders were mostly flat; Punks +1% at 29.7 ETH, BAYC even at 6.85 ETH, Pudgy -1% at 3.38 ETH
• Rare Friends (+40%) and Stonkbrokers (+11%) led top movers
• Zksnarks raised $37M in their public auction which closed at 1.5 ZEC, with trading going live today
• FWA launched its v2 on Wednesday, leading to a 50% jump in the FWA token to $17M