Galaxy Digital Urges SEC to Let Tokenized Securities Trade on AMMs
Galaxy Digital filed a letter with the SEC’s Crypto Task Force this week, arguing that automated market makers (AMMs) must be allowed to commerce tokenized securities with out registering as exchanges.
The submission instantly challenges positions taken by SIFMA, the lobbying group that represents conventional Wall Street broker-dealers.
Galaxy Says AMMs Fall Outside Exchange Rules
In its filing, Galaxy Digital laid out why AMMs that meet particular standards shouldn’t qualify as “exchanges” underneath the Securities Exchange Act of 1934.
The agency pointed to options like deterministic settlement, full transparency, non-discriminatory entry, and the absence of discretionary management.
Galaxy additionally argued that liquidity providers on these platforms usually are not “sellers” as a result of they commerce for their very own accounts, haven’t any clients, and don’t solicit orders.
The agency proposed a conditional innovation exemption that would come with whitelisting, quantity caps, and required disclosures to protect market integrity.
The letter frames the controversy as a structural query about whether or not tokenized stocks ought to transfer via decentralized protocols or stay confined to conventional market infrastructure.
SIFMA has pushed to hold these belongings inside legacy methods, a place Galaxy described as inconsistent with the SEC’s personal technology-neutral stance.
Broader Regulatory Shift
The submitting arrives because the SEC expands its pro-crypto posture. The company launched Project Crypto earlier this 12 months to carry capital markets onto blockchain rails.
In March 2026, the SEC and CFTC issued a joint taxonomy classifying digital belongings into 5 classes, together with tokenized securities.
Galaxy itself turned the primary NASDAQ-listed firm to tokenize its equity on a public blockchain, with a shareholder vote deliberate for May 2026 via Broadridge’s governance platform on Avalanche.
Whether the SEC sides with Galaxy or SIFMA on AMM classification could decide how tokenized fairness markets develop for years to come.
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