A Solana venue for tokenized shares of Galaxy Digital, Exodus Movement and Forward Industries plans to operate without registering with the SEC, relying instead on the agency’s Innovation Exemption, according to a public notice its operator, Formation Securities, posted on Nov. 9.
Formation, which licenses its trading software from Orca, a Solana automated market maker (AMM), told the SEC the same day that it intends to run a tokenized securities venue (TSV) and expects trading to begin in early 2027. The notice is not an approval: it states that the SEC “has not passed upon the merits or accuracy of the disclosures” it contains. Formation’s release calls the venue the first TSV on Solana. A separate tokenized stock venue from Intercontinental Exchange (ICE) and OKX had drawn 67 issuer objections as of its Nov. 5 notice.
Ram Ahluwalia, founder of Lumida Wealth, questioned the case for tokenized stocks when those objections came up on the Nov. 2 episode of Unchained’s Bits + Bips. “I don’t know what’s being solved by tokenizing a stock on chain,” he said. “It’s a free country, you can still tokenize things, you’re permitted to. But if you, if you’re not solving a problem for a customer, you’re not creating value.”
Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter.
How the Venue Works
Per the notice, all trading runs through permissioned AMM liquidity pools built on licensed Orca smart contracts, with no order book. Only wallets cleared through identity checks, including know-your-customer and know-your-business (KYC/KYB) verification, sanctions and wallet screening, can trade or add liquidity. Tokenized stocks on the venue can be swapped for only two kinds of assets: tokenized money market funds, or crypto assets that aren’t securities.
Formation won’t hold users’ assets or private keys. Its board oversees the venue offchain, and Formation keeps administrative control of the smart contracts, including the power to upgrade or pause them, set fees and edit the allowlist. Upgrades and other critical changes need a multi-signature approval from Formation staff; trading pauses don’t. The notice identifies Formation as a wholly owned subsidiary of Valcrest, Inc.
The exemption also caps activity. Under the SEC’s order granting it (Release 34-106402), a venue can list up to 75 Tier 1 stocks and trade no more than 0.25% of each one’s average daily share volume in the prior month, and up to 250 Tier 2 stocks at 2.5%. The order borrows those tiers from the market’s Limit Up-Limit Down (LULD) volatility plan: Tier 1 covers stocks in the S&P 500 and Russell 1000 indexes plus certain exchange-traded products, and Tier 2 covers other listed stocks.
Issuers Get a Say
The notice says no issuer had filed an objection as of Nov. 9. For shares tokenized by third parties without the company’s involvement, Formation must notify the issuer and wait out the objection window before listing them.
“Tokenized stocks will succeed only if public companies see the value in them, and we intend to build this market together with issuers,” Christopher Montagano, Formation’s president, said in the release.
Superstate and Securitize are expected to supply the tokenized shares, while Alpaca, Anchorage Digital Bank, BitGo, Fireblocks, Jito’s JTX, Solflare, Squads and CoinList’s Passage are lined up to route investors to the venue. The effort grew out of Project Open, an April 2025 proposal to the SEC’s Crypto Task Force from a group that included Orca, Superstate and the Solana Policy Institute. The SEC released the exemption in September.
Related Listen: Why The Innovation Exemption Is a Glimpse at the Next Two Years in Crypto
