News that the U.S. Securities and Exchange Commission delayed its tokenized securities regulatory plan hit market sentiment on Friday, sending shares of several crypto companies with tokenization exposure lower.
Bullish, the digital asset platform, fell about 8% at one point in early trading, while blockchain lending company Figure dropped about 9%. Coinbase shares were down about 2%, and stablecoin issuer Circle slipped nearly 4%. Securitize, the issuer of BlackRock’s tokenized fund BUIDL, also fell as much as 5% intraday.
Innovation exemption plan delayed again
The market move was tied to another delay of the SEC’s closely watched “innovation exemption” plan. The proposal had been seen as a way to lower regulatory barriers for companies seeking to issue and trade tokenized securities, potentially helping Wall Street move deeper into on-chain securities.
At the same time, the SEC canceled a related meeting that had been scheduled to discuss whether to roll out a new regulatory framework for investment contracts tied to some crypto assets.
Regulatory uncertainty spills into crypto assets
The uncertainty did not stop with public companies tied to tokenization. It also weighed on the broader crypto market. UNI, the native token of decentralized exchange Uniswap, fell about 7% over the past 24 hours, making it one of the weakest-performing assets in the CoinDesk 20 index.
Analyst sees a short-term speed bump
Owen Lau, senior analyst at Clear Street, said the SEC delay is a “speed bump” for the tokenization sector, but does not change the longer-term trend.
Coinbase and Bullish are still moving ahead with tokenized stock efforts, while Nasdaq and the New York Stock Exchange are also building related infrastructure. Market attention is now turning to when U.S. regulators will provide clearer rules for tokenized securities, and whether debate over the Digital Asset Market Structure Act, or CLARITY Act, and the scope of SEC authority will affect the pace of industry development.