The U.S. Securities and Exchange Commission (SEC) is expected to announce an 'innovation exemption' framework for tokenized stocks as early as this week — the first official regulatory structure to allow publicly listed company shares to be issued and traded as blockchain-based digital tokens. While regulators are still designing the rules, decentralized exchange Hyperliquid has already built a multi-billion-dollar tokenized asset market and established facts on the ground.
SEC Prepares Its First Regulatory Framework for Tokenized Stocks
According to Bloomberg reporting on May 18, the SEC plans to release its innovation exemption framework as early as this week. The core of the regulation defines the conditions and scope under which listed company shares can be issued and traded as blockchain tokens.
A notable detail under consideration: tokens issued without the underlying company's explicit approval may be allowed to trade. In such cases, token holders may not receive traditional shareholder rights such as voting or dividend entitlements — a structure inherent to trading on decentralized crypto platforms.
Hyperliquid Built the Market Before the Rules Existed
While the SEC was still designing its framework, Hyperliquid had already grown tokenized stock and commodity futures markets to material scale — entirely outside existing regulation.
Hyperliquid's HIP-3 framework allows anyone who stakes 500,000 HYPE (approximately $25 million) to deploy their own perpetual futures exchange directly on the protocol. trade.xyz, the largest HIP-3 builder, controls over 90% of HIP-3 open interest and leads the tokenized stocks and commodities markets.
As of March, HIP-3 market open interest had surpassed $1.2 billion. Of the top 30 markets, only 7 were crypto pairs — the rest were stock and commodity futures. Equities, crude oil, and precious metals were driving Hyperliquid's real trading volume, not crypto.
The most recent example: on May 18, trade.xyz launched a pre-IPO synthetic perpetual futures contract for SpaceX (SPCX-USDC), priced at $150 per share implying a $1.78 trillion market cap. The contract recorded $33 million in trading volume on day one.
Ondo Finance Brings Real-Equity-Linked Tokens to Hyperliquid
Beyond synthetic futures, tokens directly linked to real equities are also flowing into the Hyperliquid ecosystem.
Ondo Finance has bridged 35 tokenized stocks and ETFs — including SPY, QQQ, NVDA, TSLA, and GOOGL — from Ethereum and BNB Chain to HyperEVM via its LayerZero-based Ondo Bridge. Hyperliquid users can now combine tokenized spot positions with perpetuals in a single environment.
Felix Protocol, partnered with Ondo Finance, supports trading in over 250 U.S. equity tokens on HyperEVM, claiming $1 million orders can be filled at under 10 basis points in cost. The service is not available to U.S. users or residents of certain regulated jurisdictions.
Coinbase and Robinhood Race to Reshape the Industry
Major crypto platforms including Robinhood, Kraken, and Coinbase are launching or preparing tokenized stock products ahead of the SEC's official announcement. Industry estimates suggest that moving just 1% of global equities on-chain could create a new market worth approximately $1.3 trillion.
Pantera Capital's 'State of Tokenization Q1 2026' report puts the current tokenized asset market at $321 billion tracking 593 assets. Stablecoins account for 91.6% of that total; non-stablecoin assets like equities score an average on-chain maturity of 2.04 out of 5 — still early. But Hyperliquid's trajectory shows the market is moving faster than the regulators.
Tokens Without Voting Rights: How Much of This Is Really 'Stock'?
Market attention has turned to the regulatory specifics. If tokens issued without company approval carry no voting rights or dividends, they are functionally closer to derivatives tracking a stock price than actual equity. Whether the SEC defines this structure as a new asset class or leaves it in a legal gray zone will determine whether tokenized stocks become a legitimate category or a regulatory arbitrage vehicle.
Traditional broker-dealers have spent decades complying with disclosure requirements, settlement infrastructure, and investor protection rules. If crypto platforms receive partial exemptions from those obligations through an innovation carve-out, the same economic function will be subject to different rules — a textbook regulatory arbitrage problem that incumbent securities firms are unlikely to accept quietly.
