Formation Securities Aims to Launch Tokenized Stock Trading on Solana
Formation Securities has announced its intention to operate a tokenized securities venue on the Solana blockchain, positioning itself as one of the early players in trading tokenized U.S. stocks on-chain. The firm filed a notification with the Securities and Exchange Commission (SEC) under the agency’s “Innovation Exemption.”
SEC’s Innovation Exemption Paves the Way
The SEC’s Innovation Exemption, introduced in September, provides conditional relief allowing eligible tokenized stocks to be traded through permissioned automated market maker pools on qualifying venues. Formation Securities’ filing indicates its readiness to operate within these parameters.
Trading is anticipated to commence in early 2027. Initial offerings are expected to include tokenized shares of Exodus Movement, Forward Industries, and Galaxy Digital. The initiative aims to leverage the advantages of blockchain trading, such as 24/7 market access and near-instantaneous settlement, while preserving the rights traditionally associated with stock ownership.
Ensuring Investor Rights and Settlement Integrity
Under the exemption, tokenized shares must retain the same voting and dividend rights as their traditional counterparts. A key feature of this model is atomic on-chain settlement, designed to mitigate settlement risk. While a company’s transfer agent will continue to maintain the official shareholder record, all trades will be recorded in real-time on the public ledger.
Christopher Montagano, president of Formation Securities, emphasized the importance of issuer buy-in for the success of tokenized stocks. “Tokenized stocks will succeed only if public companies see the value in them, and we intend to build this market together with issuers,” he stated. Formation Securities licenses its trading technology from Orca, a Solana-based exchange.
Key Partners and Access for Investors
Tokenization firms Securitize and Superstate are slated to provide the tokenized shares. Carlos Domingo, CEO of Securitize, confirmed that their tokens are backed by actual shares held by their broker-dealer.
Access to the venue will be restricted to verified investors. They will be able to connect through Formation’s platform and a network of distributors, including Alpaca, CoinList’s Passage, custodians Anchorage, BitGo, and Fireblocks, as well as wallet providers Solflare and Squads.
A Growing On-Chain Securities Landscape
Formation Securities’ move enters a rapidly expanding field of companies seeking to bring stock trading onto the blockchain. This development follows similar initiatives, including the NYSE’s collaboration with Avalanche for its planned tokenized securities platform, Securitize’s own tokenized stock launches on Solana, and an ongoing OKX-ICE venue project. Notably, all of the “Magnificent Seven” stocks opted out of the latter.
This effort is partly built upon Project Open, a proposal submitted to the SEC in 2025 by a coalition that includes Orca, Superstate, and the Solana Policy Institute.
Formation cited Solana’s speed, low transaction costs, and established track record with tokenized assets as key reasons for its choice. The network currently supports over $5 billion in tokenized real-world assets.
