Securitize has chosen to actively knock on the door of regulation this time. As a leading platform focused on tokenized securities and deeply engaged in the RWA space, its co-founder and CEO Carlos Domingo revealed on November 14 on platform X that the company has recently submitted a comment letter to the U.S. SEC, calling for the regulatory agency to grant conditional exemptions for eligible tokenized security trading venues within the next five years. According to this proposal, these venues could introduce automated market makers (AMM) and liquidity pool mechanisms under set admission restrictions to trade some tokenized U.S. stocks, allowing the "algorithmic liquidity" that originally existed only in decentralized finance to attempt to enter the compliant securities market for the first time. The problem lies in the fact that the U.S. SEC has taken a cautious approach to cryptocurrency assets and various DeFi trading mechanisms over the past few years, and whether AMMs constitute regulated securities trading venues has long been locked in a regulatory gray area, never formally defined. The comment letter from Securitize is essentially a form of regulatory policy consultation and industry advocacy, aiming to shift from a "passively regulated" role to a negotiator involved in shaping the rules of tokenized securities trading. If this type of five-year exemption is ultimately adopted, it will become a testing ground for observing the risks and efficiencies of tokenized U.S. stocks under the AMM framework; however, to date, there has been no public information indicating that the SEC has made any substantive response, and whether this step will open a new compliant channel or keep it pressed within the existing gray area remains a highly uncertain gamble.
Why Securitize Actively Approaches the Regulatory Table
In this game surrounding the mechanisms for trading tokenized U.S. stocks, Securitize is not a fringe player. Over the past few years, it has played the role of a "contractor" in the realm of bringing real-world assets on-chain: building bridges between issuers and investors, mapping traditional equities, bonds, and other securities onto the blockchain compliantly, and becoming one of the main participants in the tokenized securities space. The one who meets the most real asset demand in a given field is the one who hits the regulatory ceiling first— for Securitize, this ceiling appears precisely in terms of secondary market liquidity and investor reach.
Carlos Domingo publicly acknowledged on November 14 that the company "has submitted a comment letter to the SEC," which is not a specific license application, but rather an advocacy document clearly directed at regulatory policy. The target of the comment letter is "eligible tokenized security trading venues," and the core demand is to allow these venues to trade some tokenized U.S. stocks under conditional exemptions using automated market makers and liquidity pools with admission restrictions within the next five years. In other words, Securitize hopes to secure a limited-time compliant testing ground for itself and its peers, turning the currently gray-area on-chain trading mechanisms into formal channels that can serve a broader investor base. The significance of this letter is not merely a "request for regulation not to be one-size-fits-all," but rather that the platform has stepped to the regulatory table for the first time as a stakeholder in an attempt to transform from a passively regulated entity into a negotiator involved in the boundary design of tokenized securities trading.
The Five-Year Exemption Window: A Compliance Experiment with Admission-Restricted AMMs
The proposal in the comment letter aims to secure a clearly time-defined exemption window for "eligible tokenized security trading venues"— five years. It is not a permanent exemption but rather a deliberately written observation period with a "cutoff date": during these five years, venues can trade some tokenized U.S. stocks using automated market makers and liquidity pools with admission restrictions, thereby allowing the on-chain trading mechanisms previously suspended in the regulatory gray zone to be tested under SEC scrutiny in a context with boundaries and parameters. The design of the five-year timeframe means that regulators retain the right to "increase or brake" at any time based on experimental results, while also delineating a relatively certain compliance expectation for platform operators and market participants.
The truly thought-provoking part is the phrase "admission-restricted AMMs and liquidity pools." It deliberately avoids the completely open and unrestricted decentralized environment, instead framing AMMs within a space that can design entry thresholds and control participation identities; from a regulatory perspective, AMMs are no longer merely algorithms and contracts but are regarded as a trading venue form that can embed compliance rules. If this exemption experiment is ultimately approved, the on-chain secondary market for tokenized U.S. stocks will, for the first time, systematically test the price discovery and liquidity supply efficiency based on AMMs under the aegis of U.S. securities laws: on one hand, investors can adjust positions more frequently and structurally on-chain; on the other hand, regulators can continuously review trading data and risk events over five years to decide whether such mechanisms will be incorporated into the long-term framework or returned to the gray area.
Who Can Trade Tokenized U.S. Stocks: Redrawing Thresholds and Boundaries
The comment letter explicitly states that the five-year conditional exemptions apply only to "eligible tokenized security trading venues," which essentially draws the first line at the venue level: not every on-chain AMM can list tokenized U.S. stocks, but only those that pass qualification screening may be included in the experimental pool. For these platforms, the exemption is not "burden reduction," but a "dual operation"—one side must meet the technical requirements of on-chain AMMs and liquidity pools, ensuring price discovery and trading efficiency, while the other side must comply with common information disclosure, investor suitability, and operational compliance requirements under U.S. securities regulation, transforming the system originally defined as "code equals rules" into a trading infrastructure that embeds compliance into code.
Corresponding to the venue side, "admission-restricted AMMs" also draw the second line at the user side. The comment letter has already presupposed that this will not be a completely anonymous and unrestricted participation model; participants usually need to complete identity verification and compliance checks, and whether accounts can directly access tokenized U.S. stocks may also be designed in layers — whether retail investors can enter the liquidity pools directly, whether they must go through compliant broker-dealers or specific intermediary channels, and whether institutions enjoy looser limits and product choices ultimately depends on how the SEC writes the details of "admission restrictions" within the exemption framework. The result is that even if the SEC formally grants exemptions, it can still finely control risk exposure by determining which platforms count as "eligible" and which users qualify to enter, allowing the on-chain AMMs that were originally in the regulatory gray area to only touch traditional securities trading within delineated boundaries. Ultimately, these qualifications and threshold settings will determine whether the tokenized U.S. stock experiment truly becomes an entry into a new market or merely replicates the existing securities market's high barriers onto the blockchain.
From the Gray Area to Regulatory Game: The Tug of War between SEC and DeFi
Over the past few years, the primary actions of the U.S. SEC in the cryptocurrency space have almost revolved around two main lines: determining that some token issuances involve unregistered securities offerings and that some on-chain or off-chain trading platforms involve unregistered securities trading venues or broker-dealer-like operations. In this law enforcement rhythm, although on-chain automatic market-making mechanisms have become the infrastructure of DeFi, they have remained in a position of "regulatory uncertainty"—whether AMMs count as securities exchanges or will be seen as requiring a license has never had a formal and clear regulatory definition, leaving project parties to infer regulatory intentions on the fringes of enforcement cases.
In this context of long-standing tug-of-war, Securitize's submission of the comment letter appears more as a conscious "probe": instead of passively waiting for the SEC's next enforcement action, it proactively puts the AMM trading of tokenized U.S. stocks on the negotiation table, requesting that the regulators design a limited exemption path within the existing securities law framework for specific scenarios. The comment letter itself is not binding, and there is no publicly available information indicating that the SEC has agreed to or rejected the relevant proposals, but it pushes the game into a more procedural trajectory—next, the SEC may choose to formally solicit opinions, issue guidelines, give a limited-time five-year experiment exemption, or continue to remain silent and observe. If adopted or partially adopted, it would open a compliance testing window for a few eligible platforms, accelerating the formal recognition of AMMs in the securities field; if shelved, the industry will still need to navigate the red lines within the gray area through structural design and asset selection, and whether AMMs can break free from their uncertain status of "being potentially classified as a non-compliant venue" will continue to determine the distance between DeFi and the traditional securities market.
Slow Variables of Compliance Supply: How Platforms and Users Position Themselves in Uncertainty
Securitize's proactive submission of the comment letter brings the trading of tokenized U.S. stocks and AMMs to the center of SEC rule design, essentially creating a tentative window for "compliant liquidity" in the RWA track. If the five-year waiver period envisioned in the comment letter is adopted in the future, it will provide a limited-time experimental ground for a few qualified platforms to verify the risk profiles and efficiency boundaries of AMMs in securities trading under controlled environments and subsequently influence the regulatory framework that may form. If ultimately rejected or long-delayed, tokenized securities and broader RWAs will still need to navigate through asset selection and structural design in the existing gray area to avoid crossing the red lines of securities law. Compliance supply is usually a slow variable; the SEC's acceptance of such new mechanisms often requires multi-stage evolution through consultation, pilot testing, and revisions, and to date, publicly available information has only reached the stage that Securitize has submitted a comment letter to the SEC in support of waivers, with no substantive official response from regulators. In this premise, what platforms and users can do is not to bet on a single outcome, but to reserve flexibility in business and technical architectures: continuously monitor policy trends, assess whether they can meet potential waiver conditions, and refine compliance and risk control stacks in advance so that they can quickly enter the testing pool when rules become clearer, while maintaining space for exits and migration in the event of tightening rules or outright rejections. In the coming years, whether the SEC will publish public documents regarding new rules, guidance, or exemptions related to tokenized securities or DeFi trading mechanisms, whether it will respond in writing to initiatives like Securitize, and whether it will push for broader limited-time experimental arrangements will be critical signals in assessing the trajectory of this regulatory game.
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