Traditional Exchanges Push Back Against SEC’s Potential Crypto Regulation Relaxation

The World Federation of Exchanges (WFE), representing major players like Nasdaq and Deutsche Boerse, has publicly opposed looser SEC oversight for crypto firms. In a November 21 letter, the industry group warned against exempting unregistered crypto companies from traditional market safeguards, arguing such moves could expose investors to unnecessary risks.

At issue is a proposed "innovation exemption" that WOULD allow blockchain-based tokenized equities without requiring platforms to register as broker-dealers. WFE CEO Nandini Sukumar emphasized the danger of permitting equity-like products to bypass protections afforded to traditional stock ownership. This debate highlights the growing tension between conventional finance institutions and crypto-native firms seeking regulatory flexibility.

The SEC's consideration of this exemption reflects the TRUMP administration's evolving stance on digital assets. While crypto platforms champion the proposal as necessary for innovation, traditional exchanges continue raising alarms about investor protection and market integrity concerns surrounding tokenized securities.