SEC okays 3x leveraged ETFs, mulls first tokenized equities

The U.S. Securities and Exchange Commission (SEC) has introduced a new regulatory framework allowing for the tokenization of publicly traded company shares through a specialized category of registrants known as tokenized securities venues (TSVs). Under this innovation exemption, TSVs receive a five-year temporary exemption from traditional exchange and dealer definitions, facilitating 24/7 trading of tokenized equities. OKXICE, a joint venture between OKX and Intercontinental Exchange, has filed the first application to tokenize shares of over 60 companies, including major firms like Apple, Nvidia, and Coinbase. These tokenized shares are backed one-for-one by underlying stocks held in custody, granting holders standard rights such as dividends and voting privileges. The framework requires that tokenized shares be paired with stablecoins like USDC or USDT and traded on the XLayer Ethereum layer-2 network. Notably, the SEC grants issuers the right to opt out of having their shares tokenized, a provision that has drawn criticism from platforms like Robinhood. This development marks a significant shift in U.S. market infrastructure, potentially bridging traditional equity markets with blockchain-based settlement systems.