Nikolas Sargeant
Crypto exchange Kraken held a significant meeting with the US Securities and Exchange Commission's Crypto Task Force on Monday to discuss the regulatory landscape surrounding tokenized traditional assets and trading systems. According to an SEC memorandum filed Monday, the meeting included four representatives from Payward Inc. and Kraken Securities LLC, alongside two lawyers from Wilmer Cutler Pickering Hales and Dorr LLP.
The primary focus of the discussion centered on Kraken's tokenized trading system, exploring the regulatory framework and legal requirements necessary for operating such platforms. Participants also examined the potential benefits that tokenization could bring to traditional asset trading, particularly in terms of accessibility and global reach for investors.
The timing of this meeting comes amid growing regulatory scrutiny of tokenized stocks, with traditional exchange industry associations and global regulators calling for stricter SEC oversight. Critics argue that current tokenized stock offerings lack the investor protection safeguards that exist in traditional markets, though platforms like Kraken and Robinhood continue to expand these services globally.
Despite regulatory concerns, the tokenized stock market shows promise for significant growth. Currently valued at $360 million according to RWA.xyz, tokenized stocks represent just 1.35% of all tokenized Real World Assets. Industry research suggests this sector could reach over $1.3 trillion in market capitalization if just 1% of global equities become tokenized, highlighting the substantial opportunity that regulatory clarity could unlock. Meanwhile, Kraken continues to expand its product offerings beyond traditional crypto trading into broader financial services.
