A recent report from The Information indicates the Securities and Exchange Commission (SEC) is developing a novel system that could allow company shares to be represented and traded as tokens on blockchain platforms.
This initiative is reportedly aligned with the former Trump administration’s crypto-regulatory focus, potentially opening the door for investors to acquire tokens associated with stocks like Tesla and Nvidia on various exchanges. The proposed structure closely resembles current digital currency trading practices, but would be adapted for publicly traded equities.
Sources familiar with ongoing discussions suggest that SEC personnel are actively engaging with industry participants to refine the framework. Firms such as Coinbase and Robinhood are reportedly pushing for expedited approval to enable them to offer blockchain-based stock trading directly to their clientele.
Conversely, major financial institutions and brokerage firms are allegedly opposing the concept, as it could disrupt the existing trading infrastructure that generates significant revenue for them.
SEC Acts on Token Initiative While Suspending QMMM Trading
Concurrently with its blockchain strategy, the SEC has taken action by halting trading in QMMM Holdings Ltd. after experiencing an almost 1,000% surge in its stock price within a three-week period. Cryptopolitan reported that the regulatory body cited potential manipulation of the digital media advertising company’s stock through social media promotions as the reason for the suspension.
The agency stated that “unidentified individuals” were promoting the stock online. The trading suspension is temporary and scheduled to end at 11:59 p.m. ET on October 10th.
Prior to the suspension, QMMM’s stock had already skyrocketed by 959% following the company’s announcement earlier in the month of a plan to establish a diversified cryptocurrency treasury valued at $100 million, targeting Bitcoin, Ethereum, and Solana.
In the same September 9th announcement, QMMM proclaimed a “strategic entry into the cryptocurrency sector” leveraging artificial intelligence and blockchain technologies. The SEC did not specify the timing of the social media posts recommending the stock.
During both the previous Trump administration and the current Biden administration, the SEC has initiated enforcement actions against social media promotions related to cryptocurrency. The proposed blockchain stock framework would signify a further expansion of the SEC’s regulatory purview, extending from cryptocurrencies to encompass traditional equity markets.
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