The exchange giant Kraken met with the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force this week to discuss digital asset regulation.
A proposed agenda filed with the SEC indicates the meeting was specifically focused on Kraken’s proposal for a tokenized trading system, including the potential legal and regulatory framework for operating that kind of system in the US.
In May, the Wyoming-based exchange announced its plans to launch tokenized versions of popular US-listed stocks and exchange-traded funds (ETFs) for its clients in select non-US markets.
Kraken partnered with the tokenized stocks and ETF issuer Backed to launch xStocks on the Solana (SOL) blockchain. xStocks, a tokenized equities brand developed by Backed, taps blockchain technology to offer tokenized versions of US-listed equities.
Kraken’s meeting with the SEC’s Crypto Task Force happened as traditional stock exchanges push regulators to restrict tokenized stocks.
The World Federation of Exchanges (WFE), a global industry group for exchanges and clearing houses, sent the SEC a letter last week outlining its concerns.
Nandini Sukumar, the WFE’s chief executive, argues that tokenized equities do not meet the high standards investors want.
“What we are seeing is a blatant attempt to circumvent regulation, with some firms seeking ‘no action’ relief from regulators or deliberately operating through legal grey areas. Most concerning is the risk to retail investors, who may be misled into believing they hold the same rights and protections as traditional shareholders. In many cases, they do not. Investor protection must remain paramount, and regulation must evolve to ensure that new technologies are not used as a mask for risk and opacity.”
Follow us on X, Facebook and TelegramGenerated Image: Midjourney