The World Federation of Exchanges calls on the U.S. SEC not to allow cryptocurrency companies to circumvent regulations

According to a Reuters report, the World Federation of Exchanges (WFE) is an international non-profit organization representing major securities exchanges globally. In a letter to the U.S. Securities and Exchange Commission (SEC) this week, it stated that the regulator's plan to allow crypto companies to sell "tokenized" stocks without regulation could harm investor interests.

Several crypto companies plan to sell crypto tokens linked to listed stocks; however, to sell such products in the U.S., crypto companies that are not registered as broker-dealers need to obtain a no-action letter or exemption from the SEC. SEC Chairman Paul Atkins stated that the agency is working on a securities law "innovation exemption" clause to allow crypto firms to experiment with new business models.

The WFE pointed out in its letter that the exemption could pose risks to market integrity and weaken investor protection. WFE CEO Nandini Sukumar stated, "The SEC should avoid granting exemptions to companies attempting to circumvent regulatory principles that have protected the markets for decades." The SEC published the WFE's letter on its website but declined to comment.

James Auliffe, head of the WFE's technical working group, stated, "We and cryptocurrency platforms should compete in a fair competitive environment, and we should be subject to the same rules."