US companies' BTC purchases have declined in a cliff-style manner, and there are frequent signs of weak demand

According to Woofun AI, the US Securities and Exchange Commission (SEC) issued a landmark “Innovation Exemption” announcement on September 17, formally establishing a new regulatory framework and core principles for on-chain stock trading. The exemption allows eligible tokenized securities trading venues to trade specific stocks through automated market maker (AMM) liquidity pools and grants them temporary, conditional “exchange definition exemptions”; at the same time, some institutions providing stock token liquidity can also obtain a “trader definition exemption”. This move marks the regulatory authorities' first attempt to incorporate decentralized financial infrastructure into the compliance perspective of traditional securities transactions, but its scope of application is extremely strict, pointing directly to real equity tokenization with complete legal attributes rather than synthetic derivatives that are rampant in the market.

This policy shift quickly sparked widespread discussion in the market about the release of regulatory dividends, while also clearly delineating the boundaries between compliance and non-compliance, forcing the industry to re-examine the legal structure of existing products. It is worth noting that although the exemption period is five years after the announcement is issued, this does not mean that all existing on-chain stock products are automatically eligible for admission. Instead, it reveals a more complex compliance path that requires deep restructuring, requiring participants to find a precise balance between technical implementation and legal rights, and any attempt to circumvent the essence of shareholders' rights will be excluded from this new framework.

According to data compiled by Woofun AI, this exemption places extremely detailed requirements on technical architecture and compliance procedures, and clearly defines the entry standards and operating restrictions of the AMM mechanism in securities trading. The SEC requires that relevant smart contracts must be public, auditable, and deployed on an open, permissionless distributed ledger. This regulation directly benefits mainstream public chains such as Ethereum, Solana, and Avalanche, giving them the opportunity to host tokenized securities trading venues that meet the requirements. Securitize's Carlos Domingo is optimistic, believing that the crypto industry's mature infrastructure will be formally integrated into the securities exchange system.

However, “no permission required” only modifies the technical attributes of the underlying public chain. Traders and liquidity providers entering the stock pool must still obtain permission, and establishments must set strict entry standards, such as implementing KYC verification through Uniswap V4's Hook mechanism to fulfill corresponding compliance obligations. This means that the decentralized experience of any wallet being accessed at any time and anyone adding liquidity at any time has not been released. In addition, the exemption also retains key restrictions on the number of securities, trading volume, and suspension linkage. When basic stocks are suspended on major listed exchanges, on-chain corresponding stock trading must also be suspended simultaneously, completely breaking the illusion that round-the-clock trading is not bound by the underlying market. Wintermute CEO Evgeny Gaevoy accurately pointed out that while receiving an exemption is a positive sign, cheers often overlook that the exemption probably doesn't apply to almost every product currently available.

From a structural point of view, the core of compliance is to ensure the deep binding of trading places with the underlying securities market, including a linkage mechanism when basic stock trading is suspended and transparent audits achieved through smart contracts. These technical details form a hard constraint under the new regulatory framework, requiring project parties to sacrifice some of the convenience of decentralization in exchange for regulatory approval while pursuing liquidity.

The root cause of mainstream crypto stock products being excluded from the exemption is that there is an essential difference between their legal structure and real equity, which reveals a huge gap between synthetic products and the tokenization of real equity. Robinhood's (HOOD.US) stock tokens, Ondo and xStocks equity-linked products, and stock perpetual contracts on Hyperliquid have all been specifically excluded from the exemption. These products are essentially “synthetics” (synthetic products). They replicate the economic exposure of stocks through contractual relationships, and holders obtain agreed income rights for specific products rather than the same legal rights as company shareholders.

For example, the stock token related to Robinhood (HOOD.US) uses a debt securities structure, and the investor and issuer have a debt-debt relationship, not an equity relationship; Ondo and xStocks products only provide exposure to stock prices. Investors are not shareholders of the underlying company and cannot participate in shareholders' meetings or enjoy dividend distribution. The SEC's order clearly excludes the model where a third party issues its own securities to provide synthetic exposure to underlying securities, including equity-linked securities and securities swaps. Stock tokens that are eligible for exemption must provide the same rights as similar traditional stocks, including passing voting rights when the company holds shareholders' meetings and enjoying corresponding benefits when dividends are distributed.

This lack of legal rights makes it impossible for current mainstream on-chain stock products to directly apply this exemption. The more critical variable is that synthetic products bypass issuers' control of shareholder registers, while real equity tokenization requires that holders be included in the company's legal rights system. This requires project parties to connect with listed companies house-to-house to handle complex shareholder rights matters, rather than simply replicating price fluctuations through algorithms. This difference not only affects the product's compliance, but also determines its viability in the future regulatory environment, forcing the market to shift from pursuing a model that quickly replicates stock price exposure to constructing a real equity tokenization system with full legal effect.

The AMC (AMC.US) case profoundly revealed the issuer's veto power in the tokenization process, and provided important insight into the future challenges and direction of the compliant tokenization market. Adam Aron, CEO of listed company AMC (AMC.US), has asked Robinhood (HOOD.US) to stop offering tokens linked to AMC (AMC.US) shares and threatened to appeal to the SEC. The core concern was that investors were confusing the rights they were buying and opposing the emergence of a synthetic stock market using the AMC (AMC.US) name without the company's participation. Robinhood (HOOD.US) CEO Vlad Tenev argued that the company should control the rights attached to shares, but should not have general veto over independent financial products linked to publicly traded stocks, stressing that its on-chain AMC (AMC.US) token did not add holders to the shareholders' register and did not change the underlying share rights.

However, the SEC clearly stipulates in the document that the trading place must notify the underlying stock issuer in advance and wait at least 30 days from the issuer's receipt of the notice; if the issuer objects in writing within the specified period, the place cannot carry out the corresponding transaction under this exemption. This provision essentially gives issuers such as Adam Aron's veto power, confirming its dominant position in the circulation of tokenized shares with shareholder rights. Under this innovative exemption framework, AMC (AMC.US)'s position received regulatory support, indicating that tokenizing real shares must be explicitly authorized by the issuer. The value of this document is that it provides a market form for US on-chain stock trading that can be specifically discussed and constructed. It allows tokenized stocks that fully retain shareholders' rights to try to enter AMM on the public chain, and encourages related companies to redesign products around assets, custody, access, and trading. As a result, technology companies and securities service agencies have a more clear direction of cooperation, but existing cryptographic projects face a long path of transformation, and must face complex issues such as connecting issuers one by one and dealing with shareholders' rights. Although the SEC has taken a step forward, the revolution is far from successful, and the true maturity of the compliant tokenization market still needs to overcome many legal, technical, and business model barriers.