The SEC was supposed to open the door to tokenized stocks this week. Instead, it pulled the handle off.

The agency has delayed its proposed “innovation exemption” framework, which would have allowed US crypto firms to trade blockchain-based versions of traditional equities like Apple and Tesla. The draft rules were initially slated for release the week of May 18, but the SEC has now shelved them indefinitely following pushback from traditional stock exchange officials and other market stakeholders.

No new timeline has been provided. Markets noticed.

Bitcoin dropped after the delay became public on May 22, and Coinbase stock fell approximately 4.4% on the same day. The message from Wall Street and crypto markets…