SEC Issues Innovation Exemption for On-Chain Secondary Trading of Tokenized Stocks

Galaxy’s head of research said on X that the U.S. Securities and Exchange Commission has issued an "innovation exemption" to create a path for on-chain secondary trading of tokenized stocks. According to Odaily, the exemption will run from September 17, 2026, to September 17, 2031, and will apply to certain tokenized securities trading venues that offer permissioned automated market makers and liquidity pools. The venues must be deployed on public, permissionless blockchains, but trading will be limited to verified or authorized participants. Eligible tokens must correspond to actual U.S. National Market System stocks and grant the same shareholder rights as traditional shares. The exemption does not cover primary issuance, synthetic exposure, or products that do not carry legal or beneficial rights to the underlying stock. Galaxy said it is studying next steps for enabling on-chain secondary trading of GLXY.