According to Woofun AI data, the U.S. Securities and Exchange Commission (SEC) issued a landmark "innovative exemption" announcement on September 17, formally establishing a new regulatory framework and core principles for on-chain stock trading. The exemption allows qualified tokenized securities trading venues to trade specific stocks through automated market maker (AMM) liquidity pools, granting them a temporary, conditional "exchange definition exemption." Additionally, certain institutions providing stock token liquidity may also receive a "dealer definition exemption." This move marks the first time regulators have attempted to bring decentralized finance infrastructure into the compliance purview of traditional securities trading, though its scope is strictly limited, directly targeting real equity tokenization with complete legal attributes rather than the synthetic derivatives flooding the market.

This policy shift has rapidly triggered widespread discussion about the release of regulatory dividends, while clearly delineating the boundaries between compliance and violation, forcing the industry to re-examine the legal structures of existing products. It is worth noting that despite the five-year exemption period following the announcement, this does not mean all existing on-chain stock products automatically qualify for admission. On the contrary, it reveals a more complex compliance path requiring deep restructuring, demanding participants find a precise balance between technological implementation and legal rights. Any attempt to circumvent the substance of shareholder rights will be excluded from this new framework.

Woofun AI's compiled data shows this exemption imposes extremely detailed requirements on technical architecture and compliance processes, clearly defining the admission standards and operational restrictions for AMM mechanisms in securities trading. The SEC requires relevant smart contracts to be public and auditable, deployed on public, permissionless distributed ledgers — a stipulation that directly benefits mainstream public blockchains like Ethereum, Solana, and Avalanche, giving them the opportunity to host compliant tokenized securities trading venues. Securitize's Carlos Domingo expressed optimism, believing the mature infrastructure of the crypto industry will be formally integrated into the securities trading system. However, "permissionless" only modifies the technical attributes of the underlying public blockchain; traders and liquidity providers entering the stock pool must still be licensed, with venues required to set strict admission standards, such as implementing KYC verification through Uniswap V4's Hook mechanism to fulfill compliance obligations.

This means the decentralized experience of any wallet connecting anytime and anyone adding liquidity at will has not been approved. Additionally, the exemption retains critical restrictions on security counts, trading volumes, and trading halt linkages. When the underlying stock is halted on its primary listed exchange, the corresponding on-chain stock trading must also pause simultaneously, completely shattering the illusion of 24/7 trading unconstrained by the underlying market. Wintermute's CEO Evgeny Gaevoy astutely pointed out that while obtaining the exemption is a positive signal, cheerleaders often overlook that this exemption likely does not apply to nearly all currently existing products.

Structurally, the core of compliance lies in ensuring deep binding between trading venues and the underlying securities market, including linkage mechanisms during underlying stock halts and transparent auditing through smart contracts. These technical details constitute hard constraints under the new regulatory framework, requiring projects to sacrifice some decentralized convenience in pursuit of liquidity in exchange for regulatory recognition. The fundamental reason mainstream crypto stock products are excluded from the exemption lies in the essential difference between their legal structures and real equity, revealing the enormous gap between synthetics and real equity tokenization. Robinhood (HOOD.US) stock tokens, Ondo and xStocks stock-linked products, and stock perpetual contracts on Hyperliquid are all explicitly excluded from the exemption's scope.

These products are essentially "synthetics" that replicate economic exposure to stocks through contractual relationships, where holders receive rights to returns as specified by particular products rather than legal rights equivalent to those of company shareholders. For example, Robinhood (HOOD.US) related stock tokens adopt a debt security structure, establishing a creditor-debtor relationship between investors and issuers rather than an equity relationship. Ondo and xStocks products only provide stock price exposure — investors are not shareholders of the underlying company and cannot participate in shareholder meetings or enjoy dividend distributions. The SEC order explicitly excludes third parties issuing their own securities to provide synthetic exposure to underlying securities, including stock-linked securities and security-based swaps. Tokenized stocks meeting the exemption conditions must provide the same rights as comparable traditional stocks, including passing voting rights during company shareholder meetings and entitlement to corresponding benefits during dividend distributions. This lack of legal rights renders current mainstream on-chain stock products ineligible for this exemption.

A more critical variable is that synthetics bypass issuers' control over shareholder registers, whereas real equity tokenization must include holders within the company's legal rights system. This requires projects to engage with listed companies on a case-by-case basis, handling complex shareholder rights matters rather than simply replicating price movements through algorithms. This difference not only affects product compliance but also determines their survival capability under future regulatory environments, forcing the market to shift from the model of quickly replicating stock price exposure toward building a real equity tokenization system with complete legal effect. The AMC (AMC.US) case profoundly reveals issuers' veto power in the tokenization process, providing important insights into future challenges and directions for the compliant tokenization market.

Publicly listed AMC (AMC.US) CEO Adam Aron once demanded Robinhood (HOOD.US) stop offering tokens linked to AMC (AMC.US) stock, threatening to appeal to the SEC. His core concerns centered on investor confusion over purchased rights and opposition to a synthetic stock market using the AMC (AMC.US) name without company participation. Robinhood (HOOD.US) CEO Vlad Tenev countered that companies should control rights attached to their shares but should not hold universal veto power over independent financial products linked to publicly traded stocks, emphasizing that its on-chain AMC (AMC.US) tokens do not add holders to the shareholder register nor alter underlying share rights. However, the SEC document explicitly stipulates: venues must notify underlying stock issuers in advance, waiting at least 30 days from the date issuers receive notice; if issuers object in writing within the specified period, venues cannot conduct corresponding transactions under this exemption. This clause effectively grants issuers like Adam Aron veto power, confirming their dominant position in the circulation of tokenized stocks carrying shareholder rights. Under this innovative exemption framework, AMC (AMC.US)'s position receives regulatory support, demonstrating that real equity tokenization requires explicit authorization from issuers.

The value of this document lies in providing a concrete, discussable market form for U.S. on-chain stock trading, allowing tokenized stocks that fully preserve shareholder rights to attempt entry into AMMs on public blockchains, prompting relevant enterprises to redesign products around assets, custody, admission, and trading. Technology companies and securities service institutions now have clearer directions for collaboration, but existing crypto projects face a long transformation journey, confronting complex issues such as engaging issuers one by one and handling shareholder rights. While the SEC has taken a step forward, the revolution is far from complete — the true maturity of the compliant tokenization market still requires overcoming numerous legal, technical, and business model obstacles.