SEC Advances Tokenized Stock Exemption Allowing 24/7 Trading

Happy Friday. This is Converge, The Defiant's weekly recap of tokenization, stablecoins, and real-world assets, by Chris Storaker.

Follow @ConvergeDefiant.

TOP NEWS THIS WEEK

• SEC advances an exemption for 24/7 tokenized stock trading
• Tether passes its first audit, publishes nothing

ALSO IN THIS ISSUE

• Robinhood's head of product on 200M transactions in 30 days
• Tempo wires yield around the stablecoin interest ban
• Securitize's first public quarter
• Coinbase's Abu Dhabi license; Circle's cirBTC; Robinhood's retail private-market fund

REGULATION / TOKENIZATION

SEC Advances Exemption That Could Allow 24/7 Tokenized Stock Trading

Two SEC actions on tokenized securities landed this week:

• The Commission is advancing an "innovation exemption" for tokenized listed securities, a framework Chair Paul Atkins says would let market participants run compliant onchain trading while long-term rules get written. Bloomberg reported it could open the door to 24/7 trading of stock tokens.

So far the exemption exists in speeches. Atkins said the SEC was "on the cusp" of releasing it in April and called it "forthcoming" in May, both times speaking for himself, with no legal form, date or conditions published. SIFMA has already asked for notice-and-comment plus investor limits, transaction caps and duration limits.

• SEC staff cleared Franklin Templeton's registered funds to hold its onchain money fund for cash management and securities-lending collateral, in a no-action letter that comes with 12 conditions.

The relief lets FOBXX, the $726.6 million fund whose shares live on Stellar as BENJI, work as an internal cash vehicle without forcing its digital ownership record into custody rules written for paper certificates. The conditions read like the new plumbing manual: a segregated wallet per fund, daily reconciliation, three independent checks a year, two of them unannounced.

Our take

The tokenization regime taking shape in Washington is a stack of carve-outs: an exemption promised here, a staff letter granted there, each narrower than a rule and each revocable. Franklin's relief binds staff to Franklin's facts alone, and Atkins's framework remains a speech until the Commission votes on text. US market structure has started this way before — alternative trading systems ran on exemptive relief for years before Reg ATS made them a category.

STABLECOINS

Tether Passes Its First Audit and Publishes Nothing

• KPMG US issued an unqualified opinion on Tether International's 2025 financial statements, the first full audit in the company's history and the cleanest verdict an auditor can give.

Chief financial officer Simon McWilliams put the audited result at $6.814 billion in reserves above liabilities, $476 million above the BDO attestation for the same date; the two rest on different frameworks, US GAAP against IFRS. KPMG physically counted every gold bar, per the announcement, checking $17.45 billion in precious metals alongside $8.43 billion in bitcoin and $17.04 billion in secured loans.

Tether's cushion has also thinned since the audited date; equity of $4.11 billion at June 30, down from $8.23 billion at the end of March, with its own tables showing a negative $3.171 billion financial result for the half.

Our take

The milestone is real. "No auditor will touch it" was the oldest line against Tether, and it died Thursday. But the deliverable of an audit is the statements, and what shipped was a press release; an audit you cannot read works like an attestation with better letterhead.

THIS WEEK'S INTERVIEW

Robinhood Crypto's Head of Product on 200M Transactions in 30 Days

Seong Lee, head of product at Robinhood Crypto, joins Chris Storaker on Robinhood Chain's first month: 200 million transactions in 30 days, stock tokens engineered to stay redeemable even if Robinhood disappears, and the insured DeFi lending behind the app's yield product. Five weeks ago our lead was the chain's memecoin-heavy first week; this is the answer from the person who runs it.

OTHER STORIES WORTH YOUR TIME

Tempo Wires Yield Around the Stablecoin Interest Ban

Tempo launched Tempo Earn on Aug. 12, letting fintechs pay rewards on idle stablecoin balances and keep part of the return, with payroll platform Deel first: its DLUSD runs Stripe's full stack (Bridge issuing, Privy wallets, Tempo settling) with Morpho vaults generating a promotional target of up to 4% APY.

The design routes around Section 4(a)(11) of the GENIUS Act, which bars issuers from paying holders yield; here the issuer never pays the holder, a lending protocol does. Regulators did see this pass-through coming; the OCC's proposed rule would presume yield paid through a "related third party" is the issuer's, the FDIC proposed matching text, and bank groups want both widened. The addressable pool is small for now, with about $29.9 million of stablecoins on Tempo.

Securitize's First Public Quarter Shows a Revenue Gap

Record average tokenized assets of $4.3 billion, up 16%, arrived alongside revenue down 5% to $14.4 million, tokenization revenue itself down 12%, operating costs up 56% and a net loss that widened to $21.7 million.

Shares fell about 16% after hours. It is the first print since SECZ listed on July 2, and the early verdict: tokenized assets are growing faster than anyone's ability to charge for them.

Coinbase Wins Its Abu Dhabi Tokenized-Securities License

The FSRA permission clears Coinbase to arrange deals and custody assets for what it calls its international tokenization hub, with ADGM-issued tokens backed by underlying shares and carrying dividends and voting rights. Only "Vested Holders" vote or redeem, dividends auto-reinvest, and cashing out requires exactly the bank or brokerage account the wallet was supposed to replace.

Circle's cirBTC Is Live With only 40 BTC Outstanding

Circle re-pitched cirBTC as neutral institutional collateral on Aug. 12, but the token has been live on Ethereum since June 8 and holds about 40 BTC against WBTC's 116,000 and cbBTC's 97,000. Bermuda-regulated issuance, custody at Circle National Trust and Chainlink Proof of Reserve in place of monthly attestations make it the most institutionally dressed bitcoin wrapper on the market. Distribution is the entire question.

Robinhood Prices a $200M Private-Market Fund for Retail

RVII priced 8 million shares at $25, listing on the NYSE Aug. 13 with no minimums and no accreditation gate, holding 80 private companies with a Y Combinator tilt. The structure is a business development company charging 2% of net assets plus 20% of realized gains, with leverage permitted and some exposure held through illiquid vehicles carrying their own fees. Retail access to private markets keeps arriving in fee-heavy wrappers.

Stablecoin Card Issuer Rain Buys Ansa

Rain acquired the merchant-wallet startup behind branded prepaid balances — the "Starbucks wallet" pitch — its second acquisition in nine months at a $1.95 billion valuation, with Ansa founder Sophia Goldberg becoming head of payments. The claimed prize is an unpublished Mastercard arrangement letting closed-loop balances spend on terminals merchants already own. Rain frames stored value with spend rules as the same primitive as the scoped cards it sells for AI agents.

Even more this week:

• A Tokyo Lawson register took a 322-yen JPYC payment — a barcode at the till through HashPort Wallet for Biz and the PAYTREE gateway, with no dedicated stablecoin terminal added.
• MoneyGram's cash-to-crypto ramps went native on Solana — ending the product's Stellar-only run, with trading app Rift first and cash-in live in 25 countries.
• eToro is buying US brokerage TradeZero for up to $231M — its third acquisition signed this year as crypto revenue shrinks, with closing expected only in the first half of 2027.
• BitGo's CFO is leaving as its Q2 net loss hits $19M — revenue rose 80% while margins weakened, and the company targets $15 million in annualized savings after June layoffs.
• Bitwise cut 14% of staff as client assets fell to $9B — its BITW index fund ended June at $532.8 million, roughly half its year-end level.
• Ether products led a $600M crypto ETP rebound in July — bitcoin still took 78.5% of the $133.3 billion traded during the month.
• Norway's wealth fund disclosed an $81.9M BitMine stake — 6.15 million shares at June 30, indirect Ethereum exposure through a listed company.
• SharpLink plans a $200M ETH allocation to Lido's wstETH — about 106,000 ETH, roughly 12% of its reported holdings.
• Riot signed a $9.1B, 20-year AI data-center lease at its Texas mine — projected to average $457 million a year, at a site where fully costed mining ran at 126.5% of the value of the coins it produced last quarter.
• The CFTC sued Goliath Ventures over an alleged $397M Ponzi — the complaint traces $87 million to Ponzi payments, $174 million to recruiter commissions and $48 million to the CEO's personal spending.
• Harmony patched two flaws after an unauthorized-mint claim — exchanges were asked to block four wallets while an analyst's four-billion-ONE estimate remains unconfirmed.
• Lightning nodes were drained as BTCPay users raced to patch — Foundation and Citadel21 both said nodes were swept, in some cases hours before the project's public alert.
• The BIP-110 bitcoin fork stalled at two blocks — its only miner quit, and OCEAN will refund about 0.3 BTC to miners whose hashrate it misdirected for 18 hours.

Subscribe

Converge is produced by The Defiant. This briefing is for informational purposes only and does not constitute investment advice.