They say using the SEC’s exemptive authority for tokenization may be less durable than adopting a formal securities rule, highlighting limits of case-by-case regulatory relief.
Former SEC lawyers say the agency’s use of exemptive authority to support tokenization innovation efforts would be weaker than putting those changes into a full formal rule under securities law. Their view suggests that while exemptions can offer a faster route for crypto and tokenization projects seeking regulatory accommodation, that approach may carry less legal durability and provide narrower certainty than a rulemaking process. The debate matters because tokenization typically involves placing traditional assets on blockchain rails, and market participants have been looking for clearer SEC treatment on how existing securities laws apply.