SIFMA Pushes SEC to Block Crypto Stock Exemptions Amid Industry Clash

- SIFMA has called on the SEC to deny special requests from crypto firms for tokenized equity offerings. - The move highlights growing regulatory and competitive tensions between traditional finance and the crypto industry. The Securities Industry and Financial Markets Association (SIFMA) has formally urged the U.S. Securities and Exchange Commission (SEC) to reject requests from crypto firms like Coinbase and Kraken that seek exemptions to offer tokenized equities. In a letter dated June 30, 2025, SIFMA stressed the need for a transparent and formal regulatory process to address critical policy questions about tokenized equities, while also calling on the SEC to resist piecemeal regulatory approaches. In its communication with the SEC's Crypto Task Force, SIFMA raised concerns that firms are attempting to bypass the traditional public regulatory review process, arguing this approach would undermine broader industry participation and fail to resolve vital investor protection and compliance issues. Specifically, the association questioned whether crypto platforms offering tokenized equities must secure Financial Industry Regulatory Authority (FINRA) membership and how regulators would oversee non-registered entities. Furthermore, SIFMA urged regulators to maintain clear oversight to prevent any dilution of industry standards under the guise of technology innovation. SIFMA's firm stance underscores the escalating competitive tensions, as crypto firms aim to introduce blockchain-based trading of traditional stocks—a move that could challenge the dominance of established brokerages. Consequently, if regulators approve exemptions for platforms like Coinbase and Kraken, it could mark a significant shift in market dynamics by enabling them to compete directly with legacy financial institutions. This debate arrives as crypto companies increasingly push for regulatory flexibility amid heightened scrutiny of innovative financial products. Meanwhile, Kraken has revealed plans to launch tokenized equities trading across Europe, Latin America, Africa, and Asia.