10-13-2026 
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TL;DR: The SEC is loosening its stance on crypto products. It approved Cboe’s listing of six Volatility Shares ETFs, including 3x-leveraged BTC and Ether funds, proposed rules allowing investment advisers to self-custody digital assets, and opened applications for tokenized securities venues. OKXICE filed first, while Robinhood objects to the framework’s limits. The IMF warns that the tokenized equities market is still small and fragmented.
Key Takeaways:
- SEC okays 3x leverage BTC, ETH ETFs, with no launch date until registration statements are declared effective.
- OKXICE seeks SEC ‘tokenized securities venue’ approval to offer 24/7 trading of 60+ tokenized stocks backed one-for-one by real shares.
- Robinhood not entirely cool with the SEC tokenization approach, objecting to limits on volume and asset types and to the issuer veto over tokenization.
- IMF says tokenized equity markets are small and fragmented, accounting for an estimated $2.3 billion of the $65.1 billion in tokenized real-world assets.
The U.S. Securities and Exchange Commission (SEC) is cool with leveraged crypto products, a wider selection of digital asset custodians, and has just gotten its first tokenized equities application.
Earlier this month, the SEC approved a request from the Chicago-based trading giant Cboe Global Markets (Cboe) to list six new Volatility Shares exchange-traded funds (ETFs). The ETFs will offer 3x leverage based on certain commodities, including gold, silver, crude oil, and natural gas, as well as ETFs based on the digital assets BTC and ETH.
There’s as yet no official launch date for these new products, as the SEC must still declare the registration statements for each of the new Volatility Shares’ ETFs to be effective.
The ETF registration statements issued by Volatility Shares note that these leveraged products are “not suitable for all investors,” particularly those who don’t understand that daily fluctuations in the value of the underlying assets will compound gains or losses. Broker-dealers will be required to “exercise reasonable diligence, care, and skill when making a recommendation to a retail customer” who might not understand what they’re getting themselves into.
The approval comes despite the SEC issuing a letter last December warning of the potential pitfalls of products offering 2x leverage. The SEC also issued a ‘request’ in March 2026 for companies to steer clear of launching products offering 5x leverage.
The 3x ETFs are a far cry from the 125x bets that crypto traders can make on token price movements on some non-U.S. digital asset exchanges. Regardless, it’s the latest change of heart for the SEC, which has taken on the responsibility of issuing new rules governing crypto activities following last month’s failure of the Senate’s digital asset market structure bill (the CLARITY Act).
On October 1, the SEC proposed new rules and amendments governing crypto asset custody by both registered investment advisers (RIAs) and regulated funds. The proposed rules (all 760 pages of them) are open for public comments until December 1.
Notably, the proposal would allow RIAs to self-custody digital assets under certain circumstances, such as when no permitted custodian for a particular token is available. (Those looking to self-custody would need to reverify every three months that no such custodian is available.) State trust companies could also act as custodians for both clients and regulated funds.
The rules further state that RIAs would need written agreements with their clients that state that tokens self-custodied by the RIA would be treated as financial assets under Article 8 of the Uniform Commercial Code (UCC). The idea is to offer greater protection to clients in the event their RIA goes bankrupt, ensuring clients’ claims to their digital assets are prioritized over the RIA’s other creditors.
SEC chair Paul Atkins issued a statement saying the SEC was looking to “close a gap that has left investment advisers and funds guessing how to effect lawful custody of an asset class that their clients increasingly demand.” Atkins added that the custody framework was “not an isolated initiative” but part of the SEC’s ongoing efforts to fill the gap left by CLARITY’s failure.
Tokenized gunfight at the OKXICE corral
One of the SEC’s bigger announcements of late came last month with a thumbs-up for the tokenization of shares in publicly traded companies by a new category of registrant called tokenized securities venues (TSV). Under this ‘innovation exemption,’ the SEC will grant TSVs a five-year ‘temporary’ exemption from the definition of ‘exchange’ in the Securities Exchange Act of 1934, while also offering TSV liquidity providers an exemption from the Act’s definition of ‘dealer.’
The SEC is already receiving TSV applications, including one from OKXICE TSV, the joint venture of the digital asset exchange OKX and Intercontinental Exchange Holdings (NYSE: ICE), the parent company of the New York Stock Exchange (NYSE).
OKXICE’s application features a list of 60+ companies whose shares it wants to tokenize and make available for 24/7 trading. The list features a mix of both traditional firms (Apple [NASDAQ: APPL], Amazon [NASDAQ: AMZN), Boeing [NASDAQ: BA], Coca-Cola [NASDAQ: KO], Microsoft [NASDAQ: MSFT], Netflix [NASDAQ: NFLX], Nvidia [NASDAQ: NVDA], Tesla [NASDAQ: TSLA], Walmart [NASDAQ: WMT], and more) and crypto operators, including BitGo (NASDAQ: BTGO), Coinbase (NASDAQ: COIN), Circle (NASDAQ: CRCL), and Robinhood (NASDAQ: HOOD).
These companies have been alerted to OKXICE’s intentions and have 30 days to prohibit trading in their tokenized shares. One company, AI infrastructure and semiconductor firm Cerebras Systems Inc (CBRS), has already submitted a ‘notice of issuer objection’ to OKXICE’s proposed tokenization of its shares.
Each tokenized share will be paired with a stablecoin (Circle’s USDC, Tether’s USDT, or the Global Dollar consortium’s USDG). Trading will occur on XLayer, an Ethereum layer-2 network launched by OKX. Approved customers will be issued a non-transferrable soulbound token (SBT), the existence and validity of which will be verified prior to all trades.
OKXICE will perform all necessary know your customer (KYC) and know your business (KYB) checks on individuals and entities seeking to trade OKXICE’s tokenized shares, as well as anti-money laundering (AML), countering the financing of terrorism (CFT), and sanctions screening.
Tokenized shares won’t be ‘synthetic’ versions of their real-world counterparts, but will be “backed one-for-one by underlying shares of the relevant [National Market System] stock held in custody by a broker-dealer.” Tokenized shares will provide holders “the same rights and privileges” as holders of the real thing, including dividends and voting rights.
Robinhood no longer such merry men re SEC’s tokenization framework
Ironically, Robinhood is reportedly unhappy with the SEC’s tokenization framework, including the requirement that issuers of tokenized shares have a veto over whether tokenization proceeds.
Johann Kerbrat, Robinhood’s general manager of crypto and international, told The Block that his company was “still trying to understand all the parameters,” but suggested that the SEC’s “limitations on the volume, and what type of assets we can tokenize” weren’t sitting right. “If you look at our volume on our stock tokens, it’s already pretty high and will hit some of [the SEC’s] limits.”
The SEC’s decision to give publicly traded companies the right to opt out of tokenization by third-party platforms must be a thorn in Robinhood’s side, given the apparent glee with which CEO Vlad Tenev and chief legal officer Dan Gallagher recently mocked Adam Aron, CEO of AMC Entertainment (NASDAQ: AMC), after Aron publicly objected to Robinhood tokenizing AMC shares.
Kerbrat told The Block that “some of” Aron’s criticism of Robinhood’s policies was “mostly a marketing stunt” and that “we stand behind the legal structure of our systems.”
But Aron hasn’t let up his criticism, recently tweeting at Tenev/Gallagher that “my voice will stay loud. You supported the SEC on U.S. stock tokens. They must carry voting rights, and companies can opt out. How hypocritical of Robinhood if not adopting those same principals offshore. Don’t spit in the face of the SEC.”
Neither Tenev nor Gallagher appears to have responded to Aron’s tweet.
IMF urges caution
Tokenization may be all the rage but the International Monetary Fund (IMF) is taking a more cautious approach than the SEC or the crypto firms that hope to benefit from America’s elimination of regulatory guardrails.
The IMF’s latest Global Financial Stability Report contains a chapter on tokenization that attempts to quantify the tokenized equities market and examine both the undeniable benefits and potential pitfalls of this brave new shares-on-blockchain world.
The IMF says the tokenized market “remains small and fragmented,” with future growth dependent on four factors: legal certainty, regulatory clarity, interoperability, and availability of settlement assets.
Tokenized equities are dominated by retail investors, while institutional markets focus on bonds, money market funds, and repurchase agreements (repos). Around 80% of tokenized equity trades involve sizes below a single share, “suggesting strong demand for fractionalization.”
The size of tokenized equity markets is estimated at $2.3 billion, a fraction of the $65.1 billion in overall value of all tokenized real-world assets as of July 31. Ondo Finance and the Kraken-owned Backed Finance claim a combined 70% share of tokenized equity value. And while U.S.-based issuers account for most tokenized equities, the products are largely aimed at investors outside the U.S.
To date, tokenized equity markets are plagued by low liquidity, particularly on decentralized exchanges, which makes them more volatile. This also “discourages participation by the very investors who could help deepen markets. Scaling therefore depends on greater interoperability across networks and protocols, common standards across instruments, and support for interoperable settlement assets.”
Over half of tokenized equity activity occurs outside regular U.S. market hours, suggesting that “24/7 availability is not merely a technical feature but a source of demand—particularly among investors in regions operating outside U.S. trading hours and those seeking to react immediately to news and price movements when conventional venues are closed.”
Tokenization offers opportunities to both mitigate and amplify risks. “By reducing the friction, buffers, and intermediation arrangements that traditionally help absorb shocks, these features can also alter how vulnerabilities accumulate and shocks are transmitted across markets and infrastructures.”
The IMF suggests policymakers “adopt a technology-neutral approach that allows different technologies to compete on their merits,” based on the principle of “same activity, same risk, same regulatory outcome.”
Legal certainty will involve clarifying “the rights conveyed by tokenized assets,” while regulatory clarity means that, in the short term, “existing securities, banking, and payments regulations can and should be applied to tokenized markets.”
Taking a longer view, the IMF urges greater use of regulatory sandboxes in individual jurisdictions prior to crafting legislation or regulations. Those nations that can’t afford to do so should mimic pilots and experiments in nations with deeper pockets. But overall, “greater international coordination is needed to prevent national approaches from diverging” and avoiding global regulatory arbitrage that will only further fragment these tokenized markets.
FAQs:
Did the SEC approve 3x leveraged crypto ETFs?
The SEC approved Cboe’s request to list six Volatility Shares ETFs. They include 3x-leveraged funds tied to BTC and ether (ETH), plus gold, silver, crude oil, and natural gas.
What is a tokenized securities venue (TSV)?
A TSV is a new SEC registrant category for platforms trading tokenized shares of public companies. Under the SEC’s “innovation exemption,” TSVs get a five-year temporary exemption from the definition of “exchange” in the Securities Exchange Act of 1934.
What is OKXICE?
OKXICE TSV is a joint venture between crypto exchange OKX and Intercontinental Exchange, the parent of the NYSE.
Why is Robinhood unhappy with the SEC’s tokenization rules?
Robinhood’s Johann Kerbrat told The Block the company is still working through the parameters, but objected to limits on volume and the types of assets it can tokenize. He said its stock token volume is already high enough to hit some limits.
How big is the tokenized stock market?
The IMF estimates tokenized equities at $2.3 billion, versus $65.1 billion for all tokenized real-world assets as of July 31.
What does the IMF recommend for tokenization?
The IMF urges a technology-neutral approach built on “same activity, same risk, same regulatory outcome.”
Watch: Breaking down solutions to blockchain regulation hurdles
