According to Foresight News, SEC Commissioner Hester Peirce issued a statement on the "innovation exemption" for tokenized securities, clarifying that the measure applies to specific on-chain securities trading models and is not intended to address decentralized finance (DeFi). She argued that truly automated, software-driven decentralized systems do not give rise to the intermediary‑trust concerns that underpin securities regulation; investors can engage in peer‑to‑peer transactions using permissionless smart contracts without needing an exemption.
Peirce stated that this temporary exemption permits eligible tokenized securities trading venues (TSVs) to conduct on-chain equity trading through automated market‑maker liquidity pools and grants exemptions to certain liquidity providers. The SEC will not automatically classify entities as "exchanges" or "brokers solely because they utilize these exemptions. She emphasized that the measure is intended to gather experience in preparation for long-term rulemaking, and that the SEC also welcomes other models of tokenized securities trading; on-chain trading arrangements that satisfy the requirements of the existing Securities Exchange Act may not require an exemption at all.