A coalition led by the Solana Coverage Institute, decentralized change Orca, and registered funding adviser Superstate has filed a request with the US Securities and Trade Fee (SEC) to launch a pilot program for the issuance and secondary buying and selling of securities on public blockchains.
The April 30 submitting proposes that the SEC grant exemptive aid to facilitate the challenge, named “Challenge Open,” underneath current regulatory frameworks.
The initiative would enable US entities to concern securities on public blockchain networks and allow buyers to commerce these securities by compliant interfaces. Orca would function the venue for secondary transactions.
Solana Coverage Institute CEO Miller Whitehouse-Levine stated:
“Challenge Open is an embodiment of American progress in monetary innovation. Our purpose is to work constructively with the SEC and trade companions to create web capital markets, and make all capital markets extra environment friendly, accessible, and clear.”
Superstate would concern the securities, whereas the Solana Coverage Institute would coordinate technical and regulatory engagement.
The submitting is structured as a time-limited pilot underneath SEC Guidelines 5b-3 and 15c3-3, requesting regulatory aid to design and function a market construction appropriate with current investor safety guidelines whereas using blockchain settlement layers.
The sponsors goal to reveal that publicly accessible blockchains can assist clear and compliant markets for conventional securities.
Challenge Open
The proposal would enable the issuance of tokens to symbolize securities on a public blockchain, like Solana (SOL), permitting for programmable compliance options and settlement mechanisms.
The securities can be out there to eligible buyers by interfaces ruled by know-your-customer (KYC) and anti-money laundering (AML) necessities.
Orca would offer the liquidity venue and value discovery, whereas Superstate, already working underneath an SEC-registered funding advisor (RIA) construction, would function the issuer. The pilot proposes a measured scope, focusing on restricted asset sorts and capped transaction volumes.
It seeks to judge the feasibility of public blockchain infrastructure as an alternative choice to current clearing and settlement methods comparable to DTCC, with a give attention to regulatory auditability, transparency, and operational resilience.
The coalition seeks no-action aid or exemption orders from the SEC’s Divisions of Buying and selling and Markets and Funding Administration.
The petition additionally outlines authorized arguments asserting that the pilot would stay inside the bounds of the Funding Firm Act and Trade Act, given its slender construction and oversight options.
Regulatory engagement amid market evolution
The submitting arrives at a time when the SEC is rising its engagement with tokenization and blockchain-based infrastructure.
Challenge Open explicitly requires the usage of public, decentralized blockchain infrastructure. The sponsors argue that public chains provide verifiable audit trails, open entry to market information, and decrease obstacles to entry for issuers and intermediaries, aligning with the SEC’s long-term objectives for transparency and investor safety.
The pilot would additionally present empirical information on investor habits, system efficiency, and compliance monitoring in a blockchain-native surroundings, which might inform future policymaking.
The submitting contains technical documentation detailing the cryptographic settlement mannequin, token requirements, and entry controls to assist supervisory visibility and implement compliance.
The SEC has not issued a proper response, and there’s no present timeline for a call.
If authorised, the Challenge Open pilot would symbolize one of many first SEC-sanctioned efforts to operationalize securities buying and selling straight on a public blockchain with a registered asset supervisor and decentralized change as counterparties.