Secondary market liquidity is the most important unsolved problem in tokenized securities. You can tokenize any asset in 90 days — tokenizing a Manhattan office building, a private equity fund, or a corporate bond is now a solved technical and legal problem. What you cannot reliably do is sell it afterwards. The bottleneck is not technology or legal structure; it is the scarcity of registered venues where tokenized securities can trade. The SEC has registered over 40 Alternative Trading Systems for traditional securities; fewer than 12 are authorized to trade digital securities, and most of those operate at volumes that would be considered illiquid by any institutional standard.
The ATS regulatory framework was designed in 1998 under Regulation ATS — long before blockchain existed. Operating an ATS requires SEC registration, FINRA membership, compliance with Regulation SCI (systems integrity), and adherence to Regulation SP (privacy). For digital securities, an additional layer of complexity applies: the platform must have a mechanism to interact with the blockchain on which the security is recorded. Most traditional ATS operators lack this capability and have not invested in building it.
Licensed Digital Securities ATS Platforms
| Platform | License Type | Year Approved | Asset Focus | Est. Daily Volume | Status |
|---|---|---|---|---|---|
| tZERO | ATS + BD (FINRA) | 2019 | Digital securities, tokenized equity/debt | $10–20M | Active |
| INX Digital | ATS + BD | 2020 | Crypto + digital securities | $5–15M | Active |
| Securitize Markets | ATS | 2021 | PE, RE, tokenized funds | Limited (private) | Active (restricted) |
| MERJ Exchange | ATS | 2020 | Multi-asset digital securities | Limited | Active |
| Prometheum | Special Purpose BD | 2023 | Crypto securities | Minimal | Active (controversial) |
| Dinosaur Financial Group | BD | 2021 | Digital securities | Limited | Active |
| North Capital Private Securities | BD / Portal | 2016+ | Reg D / Reg CF digital offerings | Issuance only | Active |
| Texture Capital | BD | 2022 | Alternative investments, tokenized | Limited | Active |
| DealMaker Securities | BD | 2020 | Reg A+ / Reg CF | Issuance focus | Active |
| Entoro Securities | BD | 2020 | Digital securities, structured products | Limited | Active |
| OpenDeal (Republic) | BD | 2016+ | Reg CF, digital assets | Issuance + limited secondary | Active |
| Archax | ATS (UK-linked) | 2023+ | Institutional digital securities | Institutional | Active |
The Prometheum Controversy
Prometheum’s 2023 approval as a “Special Purpose Broker-Dealer” for crypto securities became the most controversial ATS-adjacent licensing event of the Gensler era. The SEC approved Prometheum to custody and trade crypto assets that are classified as securities — but Prometheum’s approval was widely viewed as a political maneuver: the company testified before Congress in support of the SEC’s position that crypto assets are securities, and critics alleged the approval was designed to demonstrate that a compliant pathway existed (even if commercially unviable). As of Q1 2026, Prometheum has traded minimal volume and its business model remains unclear.
Why 12 Licenses Is Not Enough
The math is straightforward. If the tokenized RWA market reaches $500 billion — a conservative 2030 estimate — and trading turnover reaches even 10% annually (extremely low by equity standards), that represents $50 billion in annual trading volume, or roughly $200 million per trading day. Twelve ATS platforms with combined daily volume of $30–50 million cannot handle $200 million per day without massive capacity expansion and, more importantly, institutional market makers willing to provide liquidity.
The structural problem: institutional algorithmic trading firms (Virtu, Citadel Securities, Jane Street) provide liquidity on traditional exchanges because the markets are large enough to generate revenue from bid-ask spreads at 1–5 basis points. Tokenized securities markets are too small and too illiquid — spreads of 200–500 basis points — to attract these firms. Without institutional market makers, spreads remain wide. Wide spreads keep institutional investors out. It is a liquidity catch-22 that requires either regulatory mandates for market-making or a critical mass event — a $10 billion secondary market transaction — to break the cycle.
What Needs to Happen for Real Liquidity
Three structural changes would transform secondary market conditions by 2028. First, broker-dealer on-ramps: the 5,000+ registered broker-dealers in the US do not currently interact with tokenized securities. If even 100 integrated a digital securities custody and trading capability, order flow would increase 10x. Second, Reg A+ at scale: Regulation A+ allows tokenized offerings up to $75 million to non-accredited investors. More non-accredited investors means a larger investor base, which means more potential trading counterparties. Third, cross-platform settlement: currently, a security on tZERO cannot easily trade on INX. Interoperability protocols (ERC-3643, Polymath’s standard) could create a unified liquidity pool across platforms.
Timeline for meaningful improvement: 2027–2029, contingent on continued regulatory clarity under the Atkins SEC.
Related Trackers: SEC Enforcement Tracker · Secondary Market Liquidity · State Regulation Scorecard