SIFMA Urges SEC to Block Crypto Firms from Offering Tokenized Stocks—Wall Street Pushes Back

Wall Street's lobbying arm just drew a line in the sand—and it's blockchain-shaped.

The Securities Industry and Financial Markets Association (SIFMA) fired a warning shot at crypto companies seeking to tokenize traditional equities. Their demand? The SEC must slam the door shut on these 'digital asset experiments' before they gain traction.

Behind the scenes: Old finance vs. new rails

This isn't just about regulation—it's a power struggle. Tokenization threatens to bypass legacy clearing systems that generate billions in fees. SIFMA's members aren't about to let crypto startups eat their lunch without a fight.

The irony? These same institutions are racing to build their own blockchain solutions. But when it comes to competition, Wall Street still plays by its own rules—heavy on the 'protectionism,' light on the 'free market' rhetoric.

One thing's clear: The battle for the future of securities trading just got hotter. And as usual, the real innovation will happen despite—not because of—the financial establishment.

SIMFA asks for scrutiny of IEX’s options exchange proposal

This comes after SIFMA voiced concerns about IEX’s plans to open a new options trading site. They asked regulators to carefully check if the plan meets market fairness and transparency standards.

IEX proposed an options exchange that would introduce a 350-microsecond pause on trades. This stops very fast traders from taking advantage of small price differences. SIFMA, representing broker-dealers, investment banks, and asset managers, said the proposed setup could harm investors.

According to the association, brokers must send orders to the exchange that display the best price. However, under IEX’s plan, those displayed prices might disappear before the trade is executed, potentially leaving customers with inferior deals.

“It has been well established by the SEC and Federal Court that IEX innovations … help investors and do not harm them,” the company’s chief market policy officer John Ramsay said

SIFMA said that it is still unclear whether firms need to become members of the Financial Industry Regulatory Authority and how investors would be protected, and whether the SEC would be able to “oversee unregistered entities.” 

The SEC weighs proposals for crypto exchange-traded funds

Several firms and individuals have filed written input to the SEC’s Crypto Task Force over the past several months. The task force was created in January and is led by SEC Republican Commissioner Hester Peirce in the wake of the new Trump administration. 

For instance, some crypto companies, like Coinbase and Kraken, have started offering tokenized stocks. This allows investors to trade traditional stocks on the blockchain. Therefore, they are in direct competition with other, more traditional financial brokerages. The Kraken company has said that it wants to start dealing stocks using tokens. This will be possible in Europe, Latin America, Africa, and Asia.

Meanwhile, the SEC is looking at dozens of plans for crypto exchange-traded funds, such as ones that track SOL, XRP, and DOGE.

Reports say that the SEC is beginning to make a “generic listing standard” for these ETFs. If they do, issuers might not have to go through the usual 19b-4 process led by exchanges, which would speed up the clearance process.

Some crypto companies, like Coinbase and Kraken, want to start offering tokenized stocks. If they get permission from the SEC, they might be able to let people trade traditional stocks on the blockchain.

 This would put them in direct competition with other, more traditional financial brokerages. The Kraken company has said that it wants to start dealing stocks using tokens. This will be possible in Europe, Latin America, Africa, and Asia.

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