SIFMA Opposes SEC Crypto Relief Over Market Stability Fears

SIFMA has expressed strong opposition to the SEC's consideration of granting no-action or exemptive relief to crypto platforms seeking to trade tokenized equities. In a letter to the SEC’s Crypto Task Force, SIFMA highlighted significant concerns regarding investor protection and market stability. They argued that allowing tokenized equities to be traded outside traditional frameworks could bypass key safeguards such as FINRA oversight and broker-dealer regulations.

SIFMA's primary concern is that exemptive relief could undermine the structured environment provided by Regulation NMS, Know-Your-Customer (KYC), Anti-Money Laundering (AML), and fair market practices. They believe that such relief could lead to fragmented markets, reduced price transparency, and increased systemic risks—all issues that current regulatory systems are designed to prevent.

In response to these concerns, SIFMA is advocating for a full notice-and-comment rulemaking process. This approach would allow regulators, industry players, and the public to provide input on how to properly integrate tokenized equities into the broader U.S. financial system. SIFMA believes that this transparent process is essential for maintaining investor trust and ensuring long-term market integrity.