Formation Securities says it has notified the US Securities and Exchange Commission that it intends to run a venue for tokenized stocks on Solana, using trading technology licensed from Orca. The company announced it in a press release dated Monday 9 November at 07:30 ET (12:30 UTC). Trading is not live: Formation expects it to begin in early 2027, only for verified investors, with tokenized shares of three listed companies at launch.
The plan rests on the Innovation Exemption, the conditional relief the SEC issued on 17 September for trading tokenized versions of US-listed stocks. Formation’s headline calls this the first blockchain tokens that record a claim on an asset held off chain, such as Treasury bills, fund shares, loans or gold. A custodian keeps the asset, a transfer agent keeps the register, and the token is worth what that structure lets its holder claim.">tokenized securities venue on Solana. A notice is not an approval, though. Formation’s own public notice says neither the company nor the venue is registered with the SEC in any capacity for this business, and that the agency has not passed on the merits or accuracy of what it discloses. The SEC has said nothing about the plan in public.
The three companies named for the launch are Exodus Movement (NYSE: EXOD), Forward Industries (NASDAQ: FWDI) and Galaxy Digital (NASDAQ: GLXY). Superstate and Securitize are expected to bring tokenized shares later, the release says, without naming the companies or giving a date.
What Formation says it told the SEC about tokenized stocks on Solana
In the words of the release, Formation Securities LLC “today notified” the SEC that it intends to operate a tokenized securities venue, or TSV, the term the SEC uses in its order. The venue would sit on Solana, which the release describes as a public, permissionless blockchain, and trade eligible tokenized stocks through permissioned automated market maker pools. There will be no order book.
The public notice itself, dated 9 November and posted on formationsecurities.com, runs to 19 pages. It names the operator as a Delaware company wholly owned by Valcrest, Inc. and says the venue will not take custody of customers’ assets or private keys, lend, or sell new securities. Each tokenized stock will trade against a non-security crypto asset or a tokenized money market fund, and the venue will update the notice before it adds any stock or paired asset.
The trading engine comes from inside the group. Formation licenses it from Orca, the Solana exchange that merged into Formation in October. According to the release, Orca launched its AMM software on Solana in early 2021, users had traded more than $550 billion of digital assets through it as of 31 October 2026, and the code was formally verified by Certora and audited 11 times by four other security firms. The notice names Sec3, OtterSec, Neodyme and Kudelski Security among the auditors. Those are the company’s own figures.
How the venue would work: permissioned pools, verified investors, trading at any hour
Investors would hold the tokenized shares in their own wallets and trade them 24 hours a day, seven days a week, against stablecoins and other eligible assets. Each trade would settle on the blockchain in a single transaction, a design Formation says reduces settlement risk. Prices come only from the balance of assets in each smart contract holding reserves of two or more tokens, supplied by users, that a decentralized exchange uses to execute trades automatically at a price set by a formula.">pool. The smart contracts use no price oracle, and the notice warns that a token’s price may differ from the listed share, particularly outside regular US trading hours or when a pool is thin.
Access is closed. Only verified participants can trade, through Formation’s own platform or partners listed in the release: the broker Alpaca, Passage by CoinList, the custodians Anchorage Digital Bank, BitGo Bank & Trust and Fireblocks, Jito’s trading interface JTX, and the Solana wallets Solflare and Squads. The notice spells out the checks. Individuals give their name, date of birth, address, nationality and a government ID number, every wallet is screened, and the venue applies US sanctions lists. The firm that tokenized a stock must also approve the wallet before it can hold that token.
Neither document defines a “verified investor”, sets a minimum wealth test or lists eligible countries, although the notice expects retail as well as institutional traders. The shareholder register stays off the blockchain: issuers’ transfer agents keep the official record, while every trade is written to the public ledger. The four launch service providers each have a role in the notice. Predicate handles identity checks, TRM Labs screens wallets, Solidus Labs runs market surveillance and Sec3 audits the smart contracts.
Formation also accepts the limits the SEC attached to the exemption, and its notice puts numbers on them. For stocks in Tier 1 of the Limit Up-Limit Down plan, the venue may list at most 75 symbols and trade no more than 0.25% of the prior month’s average daily volume; for Tier 2, the limits are 250 symbols and 2.5%. Trade data in US dollars is to be published within 10 minutes of each transaction. Traders will pay a service fee, a pool fee and the Solana network fee, but the fee schedule has not been published.
Three stocks at launch, with Securitize and Superstate shares to follow
The launch list is short and close to the crypto industry. Exodus makes a self-custody wallet, and Galaxy is a crypto financial services firm. None of the three has published its own statement on the venue that we could find, so their role rests on Formation’s documents. The notice says the venue may list stocks tokenized by the issuers themselves or by unaffiliated firms, and that it had received no issuer objection as of 9 November.
Two tokenization firms are expected to add more names. Superstate co-founder and chief executive Robert Leshner said in the release: “It’s a huge step for public markets, and we couldn’t be more excited to be part of it.” Securitize chief executive Carlos Domingo said its Convertible Entitlement Tokens are held only by verified investors and that “each one is backed by a real share held by our broker-dealer”. Readers who want the background on that firm can read our profile of Securitize, the transfer agent behind BUIDL.
What the SEC’s Innovation Exemption of 17 September requires
The SEC’s order, announced in press release 2026-90 on 17 September, is the basis for Monday’s notice. It lets a TSV trade tokenized versions of NMS stocks, the shares listed on US national exchanges, under conditions. The main ones, as the SEC summarised them, are in the table below.
| Condition in the SEC order | What it means for a venue such as Formation |
|---|---|
| Limits on symbols and volume | Only a capped number of stocks and a capped trading volume; the SEC press release gives no figures |
| Same rights as the share | The venue must verify that each token gives holders the same rights and privileges as the listed share of the same class |
| Issuer notice | For a stock tokenized by an unaffiliated third party, the issuer gets written notice and a chance to object before listing |
| Public smart contracts | Contracts must be auditable, public and deployed on a public, permissionless ledger |
| Halts follow the exchange | Trading in the token stops when the underlying stock is halted on its primary listing exchange |
| Disclosure | The venue publishes its operations, its trading activity and its affiliates’ trading on it |
| Dealer relief | Liquidity providers in AMM pools using their own capital get a temporary, conditional exemption from the dealer definition |
| Duration | The exemptions expire five years after publication |
SEC chairman Paul Atkins called the exemption temporary when it was issued and said the agency invited “public comment on all aspects of the Innovation Exemption”. The SEC page does not give a comment deadline. Cointelegraph reports that venues must wait “at least 30 calendar days” before trading shares tokenized by unaffiliated third parties; that waiting period is not on the SEC press release page.
Why issuer consent decides whether a tokenized stock venue works
The issuer clause is where the first venue to file under the order ran into trouble. OKXICE, the venue backed by OKX and Intercontinental Exchange, listed 67 companies that had objected to having their shares tokenized there in its notice of 5 November. We covered that dispute in our report on the 67 issuers objecting to OKXICE and do not repeat it here.
Formation’s pitch is built around avoiding that fight. Christopher Montagano, president of Formation Securities according to the release, said: “Tokenized stocks will succeed only if public companies see the value in them, and we intend to build this market together with issuers.” Leshner, for his part, speaks of “the companies we work with”. The notice still leaves room for third-party tokens: for a stock tokenized without the issuer, Formation says it will send the issuer notice and start trading only once the objection period has passed with no objection.
Other venues are on the same road with different designs. The New York Stock Exchange picked another chain for settlement on its own planned venue, as we reported in our story on NYSE choosing Avalanche for tokenized settlement on 9 November.
Who is behind Formation: Orca and Loopscale under one name
Formation is young. Orca, a Solana decentralised exchange, and Loopscale, a lending protocol formerly known as Bridgesplit, announced on 8 October 2026 that they were merging into one New York-based company, Decrypt reported, which already planned to run a tokenized securities venue under the exemption. Loopscale co-founder Luke Truitt became chief executive and fellow co-founder Mary Gooneratne chief operating officer. Financial terms were not disclosed, and the ORCA token became the token for the whole group, with Loopscale dropping plans for its own.
Loopscale reopened its vaults after a pricing exploit days before this announcement, as told in our 8 November report on the Loopscale vaults. The venue company sits in a separate entity, Formation Securities LLC, owned by Valcrest, Inc.; the notice does not explain how Valcrest relates to the rest of the group.
The project also has a policy history. Formation says the venue builds on Project Open, a proposal sent to the SEC’s Crypto Task Force in April 2025 by a coalition that included Orca, Superstate and the Solana Policy Institute. The coalition then worked with SEC staff on how such trading could operate before the exemption was issued, the release says.
Solana’s share of the tokenized stock market
Solana is not the largest chain for tokenized equities today. Data from RWA.xyz cited by Cointelegraph on 9 November put tokenized stock value at about $575 million on Solana, against $747 million on Ethereum and $1.7 billion on BNB Chain. Formation’s release, also citing RWA.xyz, says Solana hosts more than $5 billion of tokenized real-world assets of all kinds, a wider category that includes funds and bonds.
SOL was little changed overnight. The token traded at about $86.2 at 05:43 UTC on 10 November, down 0.72% over 24 hours and 6.61% over seven days, according to market data compiled by Coindaro.
What can still go wrong before trading starts in early 2027
A notice is not an approval, and the release is careful on this point: its forward-looking statement says actual results may differ materially and that the planned products depend on legal and regulatory requirements. The SEC has not commented. No launch date beyond “early 2027” is given, and the fee schedule is still to come.
The exemption itself is still under comment, and the SEC said it could modify it. A change to the volume caps or to the issuer rules would change what Formation can list. The venue must also halt a token whenever the underlying stock is halted, so the “24/7” promise holds only while the stock is not suspended on its home exchange.
The Securitize and Superstate additions depend on issuers. Each extra stock tokenized by a third party, rather than by or with the issuer, would go through the written notice and the objection window. That is the step where OKXICE met resistance, and Formation has not said which companies it wants next; it only promises to update its notice before adding any.
Market structure is the other question. Trades would run through pools, not through a central order book tied to the national best price, and the notice warns that a large trade may move the pool price sharply or fail. Neither document names the liquidity providers. Formation says it and its affiliates will not act as one, apart from small test trades.
What it means for investors outside the US
For now, nothing changes for retail investors anywhere. The venue does not exist yet and will take verified participants only. The release warns that the products may not be available in all jurisdictions, and the notice lists identity checks without naming the countries it will accept. Formation has not said how a European, British or other non-US investor would qualify, or which local regulator would apply.
The design point to watch is rights. Before listing a token, the notice says, Formation will check that holders get dividend and voting rights, a claim on assets in a liquidation and proxy materials, and it will stop trading a token if those rights lapse. That is a different promise from a token that only tracks a price.
Tokenized stocks and AMM pools in two minutes
A tokenized stock is a token on a blockchain that represents a share. What you own depends on the structure: a direct share recorded by the transfer agent, a claim on a share held by a broker, or a derivative that only tracks the price. Our guide what are tokenized stocks, and what do you really own? goes through each case.
An automated market maker replaces the order book with a pool holding two assets, for example a tokenized share and a stablecoin. A formula sets the price from the balance of the pool, and liquidity providers earn fees for depositing assets. In Formation’s design the pools are permissioned, so only approved wallets can trade or add liquidity, and liquidity providers rely on the SEC’s temporary dealer relief.
The next public steps are the fee schedule, the SEC’s comment record on the exemption, and any statement from Exodus, Forward Industries or Galaxy confirming their part in the launch.