Wintermute Warns SEC: Don’t Let the U.S. Fall Behind in Tokenization Race

Wall Street's digital future hangs in the balance as regulatory inertia threatens America's competitive edge.

The Tokenization Tipping Point

Wintermute's stark warning echoes across trading desks and boardrooms—the SEC's cautious approach risks ceding trillion-dollar market opportunities to more agile jurisdictions. Tokenization isn't some distant fantasy; it's rewriting asset liquidity rules right now.

Regulatory Paralysis Meets Financial Revolution

While other nations sprint toward blockchain-based financial infrastructure, U.S. regulators keep playing whack-a-mole with innovation. Traditional finance dinosaurs might cheer slower disruption—after all, those legacy fees won't protect themselves.

The Global Race Heats Up

Asia and Europe aren't waiting for American permission to build the next-generation financial stack. Their regulatory sandboxes actively court tokenization projects that could eventually challenge Wall Street's dominance. Because nothing motivates change like watching competitors eat your lunch.

Wake-Up Call or Snooze Button?

The SEC faces a simple choice: adapt oversight for the digital age or preside over America's financial decline. Meanwhile, traditional finance keeps charging 2% management fees for analog assets in a digital world—some traditions die harder than others.

The financial world is rapidly entering a new era where traditional assets like stocks and bonds can be represented on the blockchain. Tokenization is gaining momentum worldwide, and the U.S. is under pressure to keep pace. Trading firm Wintermute has submitted recommendations to the Securities and Exchange Commission (SEC), urging rules that support innovation instead of slowing it down.

Wintermute’s Call for Regulatory Clarity

Wintermute’s proposal focused on three key areas critical to tokenized securities adoption: custody, settlement, and DeFi participation.

• Custody – Brokers and dealers should be allowed to securely store tokenized assets.
  
• Settlement – On-chain settlement using stablecoins should be recognized as a safe and efficient process.
  
• DeFi Participation – Firms should be able to join decentralized finance activities such as liquidity pools and lending, without these automatically being treated as broker-dealer activities requiring heavy registration.
  

The firm also stressed that network tokens like Bitcoin, Ethereum, Solana, and XRP should not be classified as securities, as they FORM the backbone of decentralized systems.

Tokenization Momentum in the U.S.

The push comes as tokenized real-world assets (RWA) are gaining traction globally. The total tokenized RWA market is now valued at nearly $28 billion.

• Dinari has secured a broker-dealer license to issue tokenized stocks.
  
• Coinbase and Kraken are pursuing similar licenses in the U.S.
  
• Galaxy Digital recently tokenized its SEC-registered GLXY shares on the Solana blockchain.
  

These examples show that tokenization is no longer theoretical—it’s a fast-growing segment of financial markets attracting both major exchanges and new platforms.

Shaping the Future of Finance

Wintermute’s recommendations align with the industry’s wider call for a regulatory framework that balances innovation with investor protection. Unlike traditional Wall Street processes, tokenization has the potential to enable new market structures with greater efficiency and broader access.

The SEC’s next MOVE will be critical. Clear guidance could establish the U.S. as a leader in tokenized markets, while prolonged uncertainty risks driving innovation overseas.

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