Solana Policy Institute, Phantom, Orca, and Superstate submit 'compliant tokenized securities' frameworks to SEC

Solana Policy Institute, a relatively new Washington D.C.-based lobbying group, is pitching U.S. regulators on catching up to the crypto age. In an announcement on Wednesday, the organization spells out a plan for bringing "tokenized securities" onchain, compliantly.

On Wednesday, the SPI, along with leading industry projects Phantom, Superstate, and Orca, submitted a series of legal frameworks via letter to the U.S. Securities and Exchange Commission's Crypto Task Force for consideration.

This "coordinated industry effort" builds on SPI’s previously proposed regulatory framework, Project Open, which seeks to modernize capital markets by tokenizing securities. Blockchain, the SPI argues, can create "more efficient, transparent, and accessible capital markets while maintaining robust investor protections."

"Project Open has the potential to unlock transformative change for capital markets, enabling billions in traditional assets including stocks, bonds, and funds to trade 24/7 with instant settlement, dramatically lower costs, and unprecedented transparency — while maintaining the United States' competitive edge in financial innovation," the Solana Policy Institute wrote in a letter.

Key to SPI's pitch is that decentralized protocols are fundamentally different from the system of brokers, clearinghouses, and custodians that existing securities laws were written to address. Instead, decentralized protocols — like automated market makers — are architected to remove middlemen, or exactly the type of service providers regulators are meant to regulate.

Together, the three industry participants — wallet maker Phantom, financial infrastructure firm Superstate, and decentralized exchange Orca — represent how blockchain developers have built a parallel financial system that essentially achieves the ends of traditional market structure without ever taking possession of a user's assets.

To that end, the SPI argues the SEC should give "exemptive relief" to non-custodial, autonomous blockchain infrastructure that doesn't "interpose" itself between peers. The organization is also requesting the SEC Task Force's guidance on how securities can be compliantly issued and traded onchain.

"Decentralized automated market makers like Orca Protocol should not be classified as exchanges, brokers, dealers, or clearing agencies under existing securities laws because they operate as autonomous, non-custodial systems that are user-directed rather than intermediate," the organization writes.

SPI's latest interaction with the SEC Crypto Task Force comes after months of evolution at the agency, which was once criticized by market participants for being alienating at best and often abusive.