TLDR
- Galaxy Digital told the SEC that some AMMs should not count as exchanges.
- The firm said AMM liquidity providers are not dealers under current law.
- Galaxy proposed whitelisting, volume caps, and disclosures for tokenized securities.
- The filing challenges SIFMA’s call to keep tokenized stocks on legacy rails.
- The SEC decision may shape how tokenized equity markets develop in the US.
Galaxy Digital has asked the US Securities and Exchange Commission to let tokenized securities trade on automated market makers. The firm said qualifying AMMs should not be treated as exchanges under current law. It also said liquidity providers on those platforms should not be treated as dealers.
Galaxy Digital sets out its core case
Galaxy Digital sent its letter to the SEC’s Crypto Task Force this week. The filing focused on tokenized securities and AMM-based trading. The firm asked for a clear rule path.
Galaxy said some AMMs work without discretionary control. It also pointed to transparent pricing and deterministic settlement. In its view, those features place such systems outside exchange rules.
The firm said access on these AMMs is non-discriminatory. It also said the rules should stay technology neutral. That point directly challenges arguments from traditional market groups.
Galaxy framed the issue as a choice about market structure. It said tokenized stocks could move through decentralized protocols. Or they could stay inside traditional systems.
Firm disputes dealer and exchange labels
Galaxy argued that qualifying AMMs do not match the Exchange Act definition of an exchange. The filing said the systems do not exercise judgment over orders. It said the code runs the process in a fixed way.
The firm also addressed liquidity providers. It said they trade for their own accounts and not for customers. It added that they do not solicit orders.
banks and brokerages are playing a cynical game: backing bitcoin and crypto in public while their DC lobbyists delay, obstruct, and oppose real integration
bitcoin has already won. tokenized stocks are the next front
we just answered SIFMA/citadel in a new letter to the SEC pic.twitter.com/CXnQxelhzT
— Alex Thorn (@intangiblecoins) April 16, 2026
Galaxy said those users do not provide two-sided quotes in the traditional sense. Because of that, it said dealer registration should not apply. The letter tied that point to the dealer-trader distinction.
The filing said these features do not weaken core market protections. Instead, Galaxy said transparency and fixed execution can support fair trading. It asked the SEC to recognize those differences.
Proposed exemption includes limits and disclosures
Galaxy did not ask for open-ended relief. It proposed a conditional innovation exemption for tokenized securities trading on AMMs. The plan includes clear safeguards.
The suggested framework includes whitelisting, volume caps, and required disclosures. Galaxy said those tools could help preserve market integrity. At the same time, they could allow compliant tokenization models.
it’s been a long road but $GLXY is finally on its way to a US listing. thanks to all who believe in us and congrats to those who have worked so hard to get @galaxyhq to this milestone. let’s go! pic.twitter.com/ks23RJYPGY
— Alex Thorn (@intangiblecoins) April 7, 2025
The company’s filing used direct language against resistance from legacy finance groups. Alex Thorn wrote on X that “banks and brokerages are playing a cynical game.” He added that “tokenized stocks are the next front.”
Even so, the formal filing kept its focus on rule design. It asked the SEC to support systems that meet specific standards. It also urged the agency to avoid rules tied to old infrastructure.
Debate grows as US policy shifts on crypto
The filing comes during a broader policy shift in Washington. The SEC has taken steps that appear more open to crypto market structure. That background gives the letter added weight.
The agency launched Project Crypto earlier in 2026. The stated aim is to bring parts of capital markets onto blockchain rails. In March, the SEC and CFTC also issued a joint digital asset taxonomy.
Galaxy has also moved on tokenization itself. The company said it became the first Nasdaq-listed firm to tokenize its equity on a public blockchain. A shareholder vote is planned for May 2026 through Broadridge’s platform on Avalanche.
SIFMA has argued that tokenized securities should remain inside legacy systems. Galaxy rejected that approach in its filing. The SEC’s response may now shape the next phase of tokenized stock trading.
