Atkins Unveils AI IPO and Tokenized Securities Trading Regulatory Standards...Declares Major Transformation of Capital Markets

▲ Cryptocurrency regulation, cryptocurrency law, US Securities and Exchange Commission/AI generated image

The U.S. Securities and Exchange Commission (SEC) has unveiled its review standards for artificial intelligence (AI) initial public offerings (IPOs) and innovative regulatory proposals for tokenized securities trading.

In an interview with CNBC on September 29 (local time), SEC Commissioner Paul Atkins clarified the review process regarding the inclusion of unconventional phrases, such as threats of human extinction, in the prospectuses of AI companies like Anthropic. Atkins explained, “Issuing companies must fully and transparently disclose material aspects of potential investments,” adding, “Staff are undergoing a thorough investigation process to inquire and review to ensure that relevant risks are faithfully disclosed.” He pointed out that potential risks mentioned by CEOs in public forums must also be reflected in the prospectus.

While concerns about a shrinking IPO market have grown recently, with companies like Oura and SB Energy postponing their listings due to rising Treasury yields, Commissioner Atkins expressed confidence in a long-term recovery. He emphasized, “In the past year and a half since taking office, 583 companies have gone public, raising approximately $208 billion,” which he stated is “a 75% surge compared to the latter half of the Joe Biden administration.” He views short-term schedule adjustments due to market conditions as a natural phenomenon and plans to revitalize the capital market by increasing the number of U.S. listed companies, which has halved over the past 30 years.

A specific regulatory roadmap for asset tokenization, a major topic in Wall Street and the virtual asset industry, was also presented. When AMC Entertainment Holdings, Inc. (AMC) CEO Adam Aron claimed illegality regarding Robinhood Markets Inc. (HOOD)'s overseas-launched tokenized stock products, citing the lack of voting rights and limitations in monitoring insider trading, the SEC directly stepped in to clarify. Atkins stated that to move away from the previous administration's restrictive policies and provide clarity to the market, the SEC has developed joint interpretative guidance with the Commodity Futures Trading Commission (CFTC) to distinguish between tokenized securities and other tokenized assets.

Although the U.S. cryptocurrency market structure bill failed to pass in Congress, on-chain capital raising and the introduction of regulatory sandboxes are being pursued rapidly. Atkins announced, “We are proceeding with the creation of on-chain funding rules and have established an innovation exemption system in the form of a regulatory sandbox.” The policy aims to clearly differentiate these from offshore tokenized products circulated as mere derivatives by enabling the trading of underlying securities with their actual rights and privileges fully implemented on-chain.

[Key Article Summary]

-SEC Commissioner Paul Atkins confirmed a strict IPO review stance, emphasizing the obligation for AI companies to disclose significant risks.

-In the past year and a half since taking office, 583 companies have gone public, raising $208 billion, marking a 75% surge in listings.

-Despite the failure of the U.S. cryptocurrency market structure bill, the institutionalization of on-chain stock trading through an innovation exemption sandbox is being pursued.

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