SEC Chair Paul Atkins had promised that the commission would move forward on crypto regulation with or without Congress. He kept that promise today with the Innovation Exemption.
The SEC issued an order granting temporary, conditional exemptive relief to Tokenized Securities Venues (TSVs), opening a regulated path for on-chain trading of tokenized National Market System (NMS) stock.
Atkins described the move as “a significant step forward, within its statutory authority, to bring America’s capital markets into the digital age.” The order arrives days after the U.S. Senate failed to pass the CLARITY Act. With Congress unable to deliver a statutory framework, the SEC stepped in and acted on its own authority.
Today, we are taking a significant step forward, within our statutory authority, to bring America’s capital markets into the digital age by facilitating onchain trading of certain tokenized stocks through the "Innovation Exemption." 🇺🇸 https://t.co/BQK0cS70lH
— Paul Atkins (@SECPaulSAtkins) September 17, 2026
The Innovation Exemption Explained
The order exempts TSVs from the standard definition of “exchange” under the Securities Exchange Act of 1934, allowing them to trade tokenized NMS stock through permissioned automated market makers and AMM Liquidity Pools.
TSVs also set the access standards that determine who can participate in those pools. Liquidity providers operating within a TSV receive a conditional exemption from the “dealer” definition under the Exchange Act, covering those who supply tokenized NMS stock using proprietary capital.
A Significant Development for Crypto and XRP
The Innovation Exemption signals a regulatory environment that is actively accommodating blockchain-based financial infrastructure. XRP, which Ripple has long positioned as a settlement and liquidity asset for institutional transactions, stands to benefit from this regulatory landscape. This is because it formally recognizes on-chain markets as a valid venue for securities trading.
Requiring smart contracts to be deployed on public, permissionless distributed ledgers establishes blockchain transparency as a regulatory standard. This aligns the SEC’s expectations with the architecture crypto networks already operate on.
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The Road Ahead
The CLARITY Act’s failure in the Senate was a setback, but Atkins has made clear that crypto regulation will move forward regardless. He has consistently said statute is the preferred path because it is not easily reversible. The Innovation Exemption means the SEC is not waiting.
For the crypto market, a regulator actively building frameworks rather than filing enforcement actions represents a fundamental shift. The foundation for a regulated onchain financial system is being laid. The CFTC has made a similar commitment to advance crypto regulation, and the next few weeks could be significant for the crypto space.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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