Broadcom, Verizon and UnitedHealth object to tokenized stock trading plan

Companies push back on tokenized share listing

Nine companies have objected to plans to trade their shares on a tokenized-stock platform being prepared by OKXICE, a joint venture between crypto exchange OKX and Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange. Broadcom (AVGO), Verizon (VZ) and UnitedHealth (UNH) are among the objecting companies.

The objections appeared in an October 15 public notice from OKXICE. The notice did not say why the companies objected, or when they sent their notices.

Separately, Nasdaq (NDAQ) has said it would opt out of having its own shares tokenized under the framework. Nasdaq is not one of the nine companies named in the OKXICE notice.

Who objected and what the notice shows

• Eight new objections were disclosed in the October 15 OKXICE notice.


• Those companies are Broadcom, Verizon, UnitedHealth, AppLovin (APP), Applied Digital (APLD), Rocket Lab (RKLB), CoreWeave (CRWV) and Applied Optoelectronics (AAOI).


• The notice lists nine objecting issuers in total, counting AI chipmaker Cerebras Systems (CBRS), which formally opted out earlier.


• Nasdaq said on its website FAQ that it would opt out of the framework.

What Nasdaq says about the venue

A Nasdaq spokesperson told the Wall Street Journal that the company does not want its shares trading on a venue that does not display best prices in real time or report to the consolidated tape, which gathers stock-market trading data.

How the OKXICE venue is meant to work

OKXICE announced on October 5 that it had notified the U.S. Securities and Exchange Commission (SEC) of plans to launch the venue, initially targeting shares of 63 U.S.-listed companies. Andrew Cuomo, former governor of New York and co-chair of the venture, announced the move on X.

The venue would operate under the SEC's five-year "Innovation Exemption," issued September 17. That exemption allows qualifying platforms to trade tokenized U.S. stocks using automated market makers and liquidity pools.

Tokenized stocks are blockchain-based versions of shares. A blockchain is a shared digital record of transactions. OKXICE plans to run around the clock using Uniswap v4 liquidity pools on OKX's XLayer blockchain, with trades settled in stablecoins — crypto tokens designed to hold a steady value.

Under the model described in its notice, underlying shares would be held one-for-one against outstanding tokens through a registered broker-dealer. Token holders must receive equivalent rights, including dividends and voting rights.

Analysts also report low issuer interest

The objections match findings from TD Securities analysts led by Reid Noch, vice president of U.S. equity market structure. The analysts wrote in a report shared with CoinDesk that talks with dozens of issuers showed "little interest in tokenizing their shares outside a small group of crypto-adjacent companies."

The report said several issuers came to the firm with significant concerns after learning about the framework, having been unaware of it when it was announced. TD Securities pointed to the framework's reliance on temporary exemptive relief.

What is confirmed

The October 15 OKXICE notice names nine objecting issuers, including the eight newly disclosed ones. Nasdaq has stated it will opt out. OKXICE announced its SEC notification on October 5 and said it initially targeted shares of 63 U.S.-listed companies. The SEC issued the Innovation Exemption on September 17.

What is still unclear

The OKXICE notice did not explain why the companies objected or when they submitted their notices. It is not yet known how the objections will affect which stocks the venue can offer.

Why it matters

Issuer resistance and uncertainty around the temporary regulatory framework could limit the number of stocks available on the venue and discourage institutional investment in tokenized trading infrastructure, according to the concerns raised in the sources.

Sources

• CoinDesk