The World Federation of Exchanges (WFE) has sent a letter urging the US Securities and Exchange Commission (SEC) to ensure crypto firms do not use broad exemptive relief to circumvent statutory obligations in connection with tokenisation. While supporting the principle of exemptive relief, the WFE warns that expansive use could create risks to investor protection, market integrity and competition in US markets. The WFE argues that relief from specific rules is appropriate only where it is reasonably necessary for a firm to offer a product or service on a level playing field and is consistent with the public interest and investor protection. If the SEC grants relief, it recommends four standards: alignment with investor protection, market integrity, fair competition and international standards; narrowly tailored exemptive orders; time limits or stage gates to control deployment and scaling while the SEC assesses risks and gathers data; and conditions on recipients, including continued SEC oversight, robust anti-money laundering requirements, clear governance, safeguards such as asset segregation, and a demonstrable commitment to fair and orderly markets.
World Federation of Exchanges 2025-11-27
World Federation of Exchanges calls on US Securities and Exchange Commission to narrow and condition tokenisation-related exemptive relief
The World Federation of Exchanges has urged the US Securities and Exchange Commission to prevent crypto firms from using broad exemptive relief to bypass statutory obligations related to tokenisation, warning it could jeopardize investor protection, market integrity, and competition. The WFE supports exemptive relief only when necessary for fair competition and public interest, recommending standards like alignment with investor protection, narrowly tailored orders, time limits, and conditions such as SEC oversight and anti-money laundering requirements.