A coalition led by the Solana Coverage Institute, decentralized alternate 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 reduction to facilitate the challenge, named “Challenge Open,” below current regulatory frameworks.
The initiative would enable US entities to difficulty securities on public blockchain networks and allow traders to commerce these securities by way of 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 business companions to create web capital markets, and make all capital markets extra environment friendly, accessible, and clear.”
Superstate would difficulty the securities, whereas the Solana Coverage Institute would coordinate technical and regulatory engagement.
The submitting is structured as a time-limited pilot below SEC Guidelines 5b-3 and 15c3-3, requesting regulatory reduction to design and function a market construction suitable 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 characterize securities on a public blockchain, like Solana (SOL), permitting for programmable compliance options and settlement mechanisms.
The securities could be accessible to eligible traders by way of interfaces ruled by know-your-customer (KYC) and anti-money laundering (AML) necessities.
Orca would supply the liquidity venue and worth discovery, whereas Superstate, already working below an SEC-registered funding advisor (RIA) construction, would function the issuer. The pilot proposes a measured scope, concentrating on restricted asset varieties and capped transaction volumes.
It seeks to guage 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 reduction 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 growing 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 supply verifiable audit trails, open entry to market information, and decrease boundaries 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 setting, which might inform future policymaking.
The submitting consists of 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 authorized, the Challenge Open pilot would characterize 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 alternate as counterparties.
