The SEC Lets a Mutual Fund Behave Like a Crypto Asset

The U.S. Securities and Exchange Commission has cleared a major structural upgrade for tokenized funds. On February 24, WisdomTree announced it will launch 24/7 trading and instant settlement for shares of its WisdomTree Treasury Money Market Digital Fund (WTGXX).

Rather than treating the fund as a crypto product, the SEC classified it as a 1940 Act mutual fund innovation. This decision allows WisdomTree to support round-the-clock secondary liquidity for registered tokenized fund shares.

Moreover, the SEC’s Division of Investment Management confirmed it issued an exemptive order for WTGXX. The Federal Register notice shows WisdomTree requested relief from Section 22(d) and Rule 22c-1. That detail matters, because Rule 22c-1 ties mutual funds to forward pricing and end-of-day processing.

The Regulatory Path That Made This Possible

WisdomTree followed a narrow legal path, not a workaround. The firm asked the SEC to permit certain broker-dealers to trade covered fund shares at $1.00 per share on a principal basis. The application also addressed joint arrangements under Section 17(d) and Rule 17d-1.

The SEC framed the approval as exemptive relief, not deregulation. As a result, WisdomTree preserves the fund’s primary-market structure while enabling continuous secondary trading.

This structure supports continuous cash management. Therefore, investors no longer need to wait for traditional settlement windows to access yield-bearing Treasury exposure. WisdomTree also states that instant settlement reduces “cash drag” by removing operational delays common in legacy systems.

Will Peck, Head of Digital Assets at WisdomTree said:

“Instant settlement has been one of the true promises of blockchains and RWA tokenization. We’re grateful for the constructive engagement with the SEC and FINRA, including the grant of exemptive relief and regulatory approvals necessary to bring this innovation to market. This is a true innovation and improvement in the investor experience, and it demonstrates how blockchain can serve as a new set of rails for capital markets. We’re thrilled to bring this feature forward for our tokenized money market fund.”

24/7 Trading and Instant Settlement

WisdomTree uses a dealer-principal liquidity model. Meaning that its affiliated broker-dealer can trade directly from inventory instead of routing orders through an exchange. The firm also confirmed that trades will initially settle against USDC.

The broader implication extends beyond one fund. The SEC demonstrated that tokenized infrastructure can operate inside the 1940 Act framework. This approval establishes a working model for regulated products that want crypto-style speed without sacrificing compliance.

With that precedent set, more asset managers are likely to explore similar structures. Indeed, regulated finance no longer needs to wait for tokenization, as it now has a rulebook to use it.

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