Hoffman was recounting an SEC question-and-answer session about bringing tokenized equity trading onshore, having just noted that the tokenized stocks that exist today are offshore and closed to US investors. His objection is not to the rules themselves but to what buyers are actually after. Ryan Sean Adams pushes back immediately, arguing no company wants shareholder votes in the hands of anonymous token holders.
Yeah, probably in a good way. I got a call from the SEC yesterday saying, Hey, we're hosting a little QA session for people like you to ask questions like this. And so, I was asking, like, Laura Shin asked, like, took my question and like drilled down even further. Like, we're still cool with the offshore tokenized stocks. And I'm not talking this. Does this pertain to the existing tokenized stock things that we already have? And they were like, no, no, no. So, those are offshore, and United States investors are not allowed to ask. We pretend they
don't exist, right? We pretend
this is about getting all of that activity onshore in a compliant and regulated way. And that's great. I think the KOIC whitelisting burden is going to be just a non-negotiable to the market. The market doesn't want a whitelisted tokenized stock. It wants a permissionless tokenized economic rights. No one cares about voting.
But there's no way a company wants a permissionless company with shareholders wants token holder shareholder votes in the hand of some hacker from North Korea. That's probably true. Yeah. So that's why these more legitimate tokenized shares with all of the sharedholder rights, including governance votes. That's why the SEC is going to bless those and the others will be available for offshare, offshore non-U.S. participants. There's also some language in here in innovation exemption, which, by the way, innovation exemption. It sounds a lot like Hester Peirce's innovation sandbox idea that she's been talking about for like
seven years. This is Hester Purce's efforts coming to fruition.
Thank you, Hester. People must remember enough and thank her enough. Permission. Also, I guess for the TSV to receive this exemption, the AMM has to be on a permissionless public blockchain. I think there's some language in the actual provision about this in the actual token exemption. Smart contract, here's some language. Smart contracts must be auditable, public, and deployed on a public, permissionless, distributed ledger, which kind of implies a walled garden chain where there's not a distributed validator base would fail that test and so wouldn't be eligible. The AMM on that chain would not be eligible for this type of exemption. Was that covered in your call?