The Securities and Exchange Commission has delayed a plan to provide broad exemptions for US crypto firms seeking to trade tokenized assets tied to stocks, Bloomberg Law reported Friday.

SEC staff had been preparing to release the so called innovation exemption for tokenized stocks as soon as this week, with a draft already prepared and reviewed internally.

The timing has since been pushed back as the agency weighs feedback from stock exchange officials and other market participants, according to the report.

The framework would have opened a clearer path for crypto firms to offer blockchain based versions of publicly traded securities under a lighter regulatory structure.

Bloomberg previously reported that the plan could allow tokens tracking public companies to trade on decentralized crypto platforms, even without the backing or consent of the companies whose shares they reference.

The delay highlights the tension between the SEC’s crypto agenda and the existing stock market structure. Chair Paul Atkins has backed an innovation exemption that would let both traditional finance firms and crypto native platforms experiment with tokenized securities, including trading through automated market makers and other onchain systems.

Atkins has said such an exemption could include volume limits, temporary relief from some rules, and a whitelisting process for buyers and sellers while the agency develops longer term rules.  

The SEC has already started laying the legal groundwork for tokenized securities. In January, agency divisions said tokenized securities remain securities under federal law, whether they are issued directly by a company, represented through a third party custody structure, or offered as synthetic exposure through linked securities or security based swaps.

The agency also warned that third party tokenized products may not provide holders with the same rights or protections as the underlying shares.  

Traditional market operators have been positioning for the same shift. DTCC plans limited production trades of tokenized assets ahead of a broader launch, while Nasdaq and ICE have also advanced tokenized securities efforts.

The SEC approved Nasdaq’s tokenized securities plan in March, while ICE has pursued tokenized stock and crypto linked products through its OKX related partnership.  

At the same time, exchange officials have pushed regulators to avoid giving crypto platforms a shortcut around market rules. A coalition of global exchanges previously urged the SEC not to let crypto firms bypass rules when offering tokenized stocks, warning that exemptions could weaken investor protections and market integrity.  

The agency has taken smaller steps toward tokenization this year. In February, the SEC granted WisdomTree relief allowing intraday trading of tokenized shares in its Treasury Money Market Digital Fund.

HYPE was among the first tokens to rally when the SEC’s tokenized stock plan emerged earlier this week, as Hyperliquid already supports stock linked markets through its perps platform. The delay reversed that momentum, sending HYPE down more than 10% below $50 before recovering near $55 at press time.