Nine Public Companies Object to OKX-ICE Tokenized Stock Plan

Nine listed firms push back on tokenized share listings

Nine public companies have formally objected to having their shares offered in tokenized form on a proposed tokenized stock platform backed by crypto exchange OKX and Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange.

The companies are Cerebras Systems, AppLovin, Applied Digital, Rocket Lab, CoreWeave, Verizon Communications, Applied Optoelectronics, Broadcom and UnitedHealth Group, according to a Thursday notice published by OKX and ICE.

The notice did not say why the companies objected. The objections show a possible obstacle for tokenized stocks, which are blockchain-based versions of company shares, and they test whether crypto platforms can build markets for public company shares without the agreement of the companies that issue those shares.

Who objected and where the notice came from

• Nine public companies filed formal objections against listings on the proposed OKX-ICE tokenized stock platform.
• The objections were listed in a Thursday notice published by OKX and ICE.
• The notice did not disclose the reason for the objections.
• The platform is backed by OKX, a crypto exchange, and ICE, the parent company of the NYSE.

What the SEC exemption requires

The objections were filed under a Securities and Exchange Commission innovation exemption announced on Sept. 17. Under that exemption, tokenized venues must give issuers written notice and a chance to object before listing third-party tokenized stocks.

Why some observers say the concerns are about pricing

Robin Nordnes, CEO of trading validation platform Raiku, told Cointelegraph that the companies are not objecting to blockchain technology itself. In his words, they are objecting to not knowing what happens to their price once the stock trades on-chain.

Nordnes said that on a public chain, the validator that builds the block sets the order. Until trading desks can measure their distance to that point, he said, best execution is a promise rather than a number.

Luke Nolan, a senior research associate at CoinShares, told Cointelegraph that the objection is not a rejection of tokenization in general. He said it is mostly about being tokenized without consent, and that the objection appears specific to this venue, meaning a company could object to one platform while allowing its shares elsewhere.

Nolan said the concerns are valid. He added that market participants have previously used specific market mechanics to cause squeezes or short-term swings in the price of the underlying asset.

Misha Putiatin, co-founder of collateral markets platform Symbiotic, told Cointelegraph that companies need to see the upside and a track record of efficient pricing. He said more real-world data would help everyone judge the benefits and risks, and that other institutional tokenization efforts, such as the Depository Trust and Clearing Corporation's tokenization services, could build more confidence in tokenized offerings.

Cointelegraph said it asked OKX for comment on the effects of the objection but had not received a response by the time of publication.

What is confirmed

OKX and ICE published a Thursday notice listing the nine companies that objected. The notice did not give a reason. Under the SEC's Sept. 17 innovation exemption, tokenized venues must notify issuers in writing and give them a chance to object before listing third-party tokenized stocks.

What is still unclear

The notice does not explain why the companies objected, and neither OKX nor ICE has given a public reason in the supplied material. OKX had not responded to Cointelegraph's request for comment when the article was published. The comments from Nordnes, Nolan and Putiatin are their own views, not statements by the companies, OKX, ICE or the SEC.

Why it matters

Tokenized stocks are blockchain-based versions of public company shares. The objections show that issuers can slow or block listings on a specific venue under the SEC exemption, even if they do not oppose tokenization in general. According to OnchainBenchmark, more than $754 million in capital moved on-chain in the past 30 days, bringing the total across stablecoins and tokenized assets to $320 billion.

Sources

• Cointelegraph