SEC Tokenized-Stock Ledger Test Draws Challenge Over Who Can Validate It

Editorial illustration: CRYPTO MAIN NEWS / OpenAI. The image represents a question about network access and does not depict an SEC decision or an operating trading venue.

A new comment on the Securities and Exchange Commission’s tokenized-stock venue order asks whether a ledger can count as “permissionless” when the public can access it but only approved participants can help determine its consensus. In a Sept. 25 letter filed under File No. 4-927, Omid Malekan argues that the order’s test may leave that distinction unresolved. His request is a proposed change in approach, not a decision by the SEC.

The question matters because the SEC’s Sept. 17 temporary, conditional order requires applications for the covered tokenized-stock trading venues to be auditable and public and deployed on a public, permissionless distributed ledger. The order describes permissionless access in terms of generally allowing anyone to read or write without authorization. It does not, in the wording identified by Malekan, expressly make open participation in consensus the test.

What the commenter wants the SEC to distinguish

Reading a ledger, submitting a transaction and participating in the process that agrees on its state are different activities. Malekan argues that a read/write definition could encompass a network whose consensus participants are selected or restricted. He asks the Commission to center its criterion on open consensus participation instead. That is his technical and policy argument; it is not an SEC finding that any particular network qualifies, or fails to qualify, under the order.

His SEC-filed accompanying paper develops the case for permissionless blockchains over permissioned networks. The paper discloses Coinbase financial support, and the letter says his views are his own. Those disclosures matter when weighing the argument: filing the materials makes them part of the public comment record, but it does not independently validate their claims or turn them into an agency interpretation.

The order remains the operative text

Malekan’s proposed consensus test should not be confused with the order’s current conditions. The SEC’s text governs the temporary relief; a commenter cannot revise it by filing a letter. The distinction here is also about access to the underlying ledger’s consensus process, not whether a trading venue may apply its own conditions to users. For the broader scope and safeguards of the order, see our earlier report on the tokenized-stock exemption.

The SEC’s public docket lists Malekan’s submission with a Sept. 25 receipt date. The reviewed docket does not show a later SEC response settling this consensus question. Nor do the reviewed records identify a specific venue that has launched under the relief. The next useful evidence would be an agency clarification or a venue-specific decision showing how the SEC applies the ledger criterion in practice.