Newsletter
- Formation Securities has notified the U.S. Securities and Exchange Commission of its plan to operate a tokenized securities trading venue on Solana. It is expected that business will be conducted under the institution's "Innovation Exemption" framework, with trading anticipated to begin in early 2027.
- The trading venue promises to provide 24/7 trading and nearly instant atomic settlement, while also preserving shareholders' voting rights and dividend rights.
- This adds it to the increasingly crowded race for on-chain stocks, ranging from transactions on the New York Stock Exchange with Avalanche to trading venues based on OKX-ICE, and then to the Project Open proposal based on Solana.
A new company is poised to become one of the first platforms to trade tokenized U.S. stocks on the blockchain and has notified the U.S. Securities and Exchange Commission (SEC) of its plans to operate a tokenized securities trading venue on Solana.
As indicated on Formation Securities, notification has been submitted, and operation is planned to take place under the "Innovation Exemption" of SEC. This exemption is a conditional relief measure issued by regulatory authorities in September, allowing qualified tokenized stocks to be traded on qualified trading venues through approved automated market maker pools.
The company expects transactions to begin in early 2027, with the first batch of tokenized stocks expected to include Exodus Movement, Forward Industries, and Galaxy Digital.
Its proposition is to offer the advantages of blockchain trading, a 24/7 market, and nearly instant settlement, without depriving investors of the rights they expect from real stocks.
Under this exemption framework, eligible tokens must enjoy the same voting rights and dividend rights as traditional stocks. Each transaction is settled atomically on the blockchain, a design aimed at reducing settlement risks. The company's transfer agents will still maintain an official register of shareholders, while each transaction is recorded in real-time in the public ledger.
Formation Securities President Christopher Montagano stated: "Only when listed companies see the value of tokenized stocks will they succeed, and we intend to build this market together with the issuers." The trading technology of Formation Securities is licensed from the exchange based on Solana Orca.
Tokenization companies Securitize and Superstate are expected to offer tokenized stocks. Securitize's Chief Executive Officer, Carlos Domingo, stated that their tokens are backed by one real share of stock held by their brokerage traders.
Access will be limited to verified investors only, who can enter this trading venue through the platform of Formation, as well as distribution channels including Alpaca, CoinList, Passage, custodian institutions Anchorage, BitGo, and Fireblocks, as well as wallet providers Solflare and Squads.
This move adds another participant to the rapidly crowded race to bring stocks onto the blockchain. The New York Stock Exchange recently chose Avalanche, a competitor of Solana, to settle its planned tokenized securities platform. Securitize has already launched tokenized stocks on Solana, and another trading venue for OKX-ICE is also in preparation. However, each of these “Magnificent Seven” stocks has chosen to withdraw from the project.
This effort is built on the foundation of Project Open. The proposal was submitted to SEC in 2025 by an alliance that includes Orca, Superstate, and Solana Policy Institute.
Formation indicates that the reason for choosing Solana is its speed, low cost, and its track record in tokenizing assets. It is also mentioned that this network carries over $5 billion in tokenized real-world assets.
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