Formation Securities Plans Solana Tokenized Stock Trading

Formation Securities LLC has notified the SEC of its intent to operate the first tokenized stock trading venue built on the Solana blockchain, targeting a launch in early 2027. The company plans to let investors buy and sell tokenized shares of real public companies directly on-chain, within a formal regulatory framework the SEC created just weeks ago.

Formation Securities filed its notice with the U.S. Securities and Exchange Commission on November 9, 2026, according to the company’s announcement. The venue would allow permissioned trading of tokenized versions of stocks listed on traditional U.S. exchanges, using Solana as the underlying blockchain infrastructure. Settlement would happen in seconds at a fraction of a cent per transaction. For related coverage, see SEC and CFTC Set Five-Year Path for Tokenized U.S. Stocks.

Key Takeaways

• Formation Securities plans to open the first SEC-notified tokenized stock trading venue on the Solana blockchain, with trading expected to begin in early 2027.
• The company operates under the SEC’s new Innovation Exemption, a five-year conditional framework that allows regulated secondary trading of tokenized stocks through automated market makers (programs that set prices and match trades automatically).
• Initial listings include three real public companies: Exodus Movement (EXOD), Forward Industries (FWDI), and Galaxy Digital (GLXY), all with issuer consent already secured.

How Formation Securities’ Solana Tokenized Stock Plan Would Work

A tokenized stock is a digital token (a unit on a blockchain) that represents ownership of a real share in a publicly traded company. It is not a separate crypto asset. The token is backed 1:1 by an actual share, and the holder retains full shareholder rights, including voting and dividends, according to Formation’s announcement. Context on this theme: Moscow Exchange Plans SOL, XRP, TRX, BNB Crypto Indexes.

Formation’s platform will use an automated market maker (AMM), which is a type of smart contract (an automated program that runs on a blockchain) that holds pools of tokens and automatically prices trades without needing a traditional order book. According to Formation’s announcement, the company licenses this trading technology from Orca, a Solana-based decentralized exchange whose AMM has processed more than $550 billion in digital asset trades as of October 31, 2026. Formation itself was formed through a merger of Orca and Loopscale. More on this in NYDIG to Sell Institutional Trading Business to BitGo for About $42.5 Million.

Trading would be available 24 hours a day, 7 days a week, using stablecoins (digital currencies pegged to the U.S. dollar) and digital wallets. The platform will halt trading when the primary stock exchange halts the underlying security, keeping it in sync with traditional markets.

According to Formation’s announcement, tokenization of the initial shares will be handled by Superstate and Securitize, two established tokenization firms. Custody of the underlying securities will be managed by Anchorage Digital Bank, BitGo Bank and Trust, and Fireblocks. This custody structure means the actual shares backing each token are held by named custody providers, rather than in a smart contract. Formation’s distribution partners include Alpaca, Passage by CoinList, Solflare, Squads, and Jito JTX.

According to CoinDesk reporting, Solana held a relatively modest share of the $3.8 billion tokenized stock market but led all blockchains in weekly tokenized stock trading volume at over $7 billion in one recent week. This gap between value held and volume traded may suggest Solana attracts high-velocity trading activity even when other chains hold more of the underlying assets.

Formation’s president, Christopher Montagano, previously served as chief legal officer of Orca. The company’s early issuer lineup reflects a deliberate strategy: all three initial companies, Exodus Movement (EXOD/NYSE), Forward Industries (FWDI/NASDAQ), and Galaxy Digital (GLXY/NASDAQ), had already tokenized their shares through Superstate or Securitize before the announcement. Getting issuer consent in advance is significant, as the SEC framework requires issuers to have the opportunity to object before a third party tokenizes their shares. This matters because other tokenized stock efforts have faced issuer pushback that narrowed their initial listings.

Why SEC Rules Matter for Tokenized Stock Trading

Formation is operating under the SEC’s Innovation Exemption, formally issued on September 17, 2026, as Release No. 2026-90. The exemption gives Tokenized Securities Venues a five-year conditional window to operate without registering as a formal securities exchange under the Exchange Act. The exemption runs through September 17, 2031, and the SEC describes it as a temporary sandbox “on the road to permanent rules.”

This regulatory framework is what separates Formation’s approach from earlier, unregulated tokenized stock products that operated in legal gray areas. The Innovation Exemption sets specific conditions: smart contracts must be auditable and deployed on public, permissionless blockchains; tokenized shares must carry the same rights as traditional shares; and trading must pause whenever the primary exchange halts the stock. These are investor protections borrowed directly from traditional markets.

Formation is the fourth firm to file a TSV notice under this exemption, following TSV LLC on September 23, OKXICE on October 4, and Perpetuals.com on October 14, 2026, according to SEC records. The first live trades under the exemption were executed on November 4, 2026 on the Canton Network by TSV LLC, marking the first real-world test of the framework before Formation’s filing. The SEC and CFTC five-year path for tokenized U.S. stocks context is relevant here: Formation’s plan fits into a broader regulatory effort to bring tokenized securities into a structured, supervised framework rather than leaving them outside the system.

Securities expert Brett W. Redfearn described the Innovation Exemption as a thoughtfully constructed step toward a workable framework for enabling trading of tokenized U.S. securities using automated market makers and liquidity pools for U.S. investors.

Robert Leshner, CEO of tokenization partner Superstate, said in Formation’s announcement: “This is the moment we’ve been building toward since we started Superstate.”

Formation’s roots trace back to “Project Open,” a coalition proposal submitted in April 2025 by Orca, Superstate, and the Solana Policy Institute to the SEC’s Crypto Task Force. That proposal laid out a blueprint for exactly the kind of regulated, on-chain stock trading Formation is now preparing to launch. For anyone considering whether blockchain-based securities trading can work within the existing regulatory system, Formation’s filing is the clearest test yet. If the platform launches on schedule in early 2027 and operates within the SEC’s conditions, it could open a path for a much wider range of stocks to trade on-chain around the clock, using wallets instead of brokerage accounts. Coinbase’s parallel effort to list tokenized shares of major companies shows that multiple approaches to regulated tokenized equities are advancing at the same time.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.