Kraken and SEC Discuss Tokenized Asset Framework for 24/7 Trading

Kraken, a major cryptocurrency exchange, recently held a meeting with the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force to discuss the tokenization of traditional assets and the development of a regulatory framework that supports this innovation. The discussion, which took place on August 25, included representatives from Kraken, the law firm WilmerHale, and SEC staff, who examined the architecture of a proposed tokenized trading system, its transaction lifecycle, and the broader legal implications [1].

The meeting centered on Kraken’s efforts to create a tokenized trading system that could offer 24/7 access to traditional equities and exchange-traded funds (ETFs). These tokenized assets, already available to non-U.S. investors, provide exposure to major stocks such as Apple, Tesla, and Nvidia at reduced costs [2]. Kraken’s expansion to the Tron blockchain in August further enhanced the programmability and global accessibility of its offerings [3].

While Kraken and similar platforms advocate for clear and supportive regulatory guidelines, critics—including the World Federation of Exchanges (WFE)—have raised concerns about the potential risks associated with tokenized assets. They argue that these assets should be subject to the same regulatory standards as traditional securities to protect market integrity [4]. The SEC, however, has indicated a preference for applying existing federal securities laws to tokenized assets rather than creating new rules. SEC Commissioner Hester Peirce emphasized that blockchain technology, while innovative, does not fundamentally alter the nature of the assets it represents [5].

The ongoing dialogue between Kraken and the SEC represents a broader effort to integrate blockchain technology with traditional financial systems. Kraken’s engagement with the task force is also a strategic move to counter narratives that oppose the tokenization of stocks. By emphasizing the benefits of increased accessibility, transparency, and efficiency, Kraken aims to position itself as a leader in shaping the future of tokenized financial markets [6].

The discussions also addressed operational and technological challenges, including the need for enhanced security measures and risk mitigation strategies. These steps are crucial in addressing concerns about market surveillance and operational bottlenecks that could hinder the growth of tokenized trading systems [7].

Investor sentiment appears to be shifting in favor of digital assets, with a recent survey indicating that 65% of U.S. investors who hold both equities and crypto believe digital assets will outperform traditional stocks in the next decade [8]. Kraken is responding to this trend by integrating advanced monitoring and reporting tools into its platform, which are designed to build trust with institutional investors and ensure compliance with regulatory expectations [9].

As the SEC moves toward a more collaborative approach with industry participants, Kraken’s engagement highlights the potential for tokenized trading systems to become a mainstream financial tool. If regulators and market participants continue to work together, tokenized assets may open new opportunities for global investors and redefine traditional market structures.

Source:

[1] https://www.xt.com/en/blog/post/kraken-and-secs-meeting-signals-major-shift-for-tokenized-assets

[2] https://www.financemagnates.com/cryptocurrency/kraken-seeks-sec-blessing-for-247-tokenized-stock-trading-platform/

[3] https://crypto-economy.com/kraken-sec-discuss-tokenized-trading-system-that-could-redefine-markets/

[4] https://cryptoslate.com/kraken-lobbies-sec-on-integrating-tokenization-into-financial-markets/

[5] https://www.mitrade.com/insights/news/live-news/article-3-1068863-20250826

[6] https://blockonomi.com/kraken-pushes-sec-for-green-light-on-tokenized-trading-systems/

[7] https://www.ainvest.com/news/tokenized-stocks-regulatory-crossroads-trillion-dollar-opportunity-2508/

[8] https://www.cryptotimes.io/2025/08/26/sec-crypto-task-force-kraken-talks-put-tokenization-in-focus/