Orca Chief Legal Officer Christopher Montagano said at Korea Blockchain Week that the U.S. Securities and Exchange Commission’s innovation exemption, issued on Sept. 17, creates a framework to test whether DeFi-based blockchain rails are more efficient than traditional market infrastructure. The exemption provides conditional relief for five years, through Sept. 17, 2031. Under the arrangement, tokenized securities venues and certain liquidity providers can operate licensed trading in tokenized U.S. stocks without registering as an exchange or broker-dealer. Montagano said the exemption was designed specifically for automated market makers, or AMMs, but does not amount to a ruling on DeFi itself. He added that participants still need to comply with sanctions rules and obtain issuer consent, distinguishing the model from permissionless DeFi. Montagano also said Orca has been involved in discussions with the SEC since 2025 and began trading tokenized stocks in November of that year.
Orca Chief Legal Officer Christopher Montagano said at Korea Blockchain Week that the U.S. Securities and Exchange Commission’s innovation exemption, issued on Sept. 17, creates the conditions to test whether DeFi blockchain rails are more efficient than traditional infrastructure.
According to Montagano, the exemption grants conditional relief for five years, through Sept. 17, 2031. Under that framework, tokenized securities venues and certain liquidity providers can run licensed trading in tokenized U.S. stocks without registering as an exchange or broker-dealer.
Montagano said the exemption was designed for AMMs, but it does not represent a judgment on DeFi. Parties operating under the framework still need to comply with sanctions rules and obtain issuer consent, which he said sets it apart from permissionless DeFi.
He also said Orca has taken part in discussions with the SEC since 2025 and started trading tokenized stocks in November that year.
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