Wall Street’s onchain guest list shrinks fast: 33 issuers object to OKXICE

Thirty-three companies have objected to having their shares offered in tokenized form on the proposed OKXICE venue, a 50-50 joint venture between cryptocurrency exchange OKX and New York Stock Exchange owner Intercontinental Exchange (ICE). The objections began with Cerebras Systems, AppLovin, Applied Digital, Rocket Lab, CoreWeave, Verizon Communications, Applied Optoelectronics, Broadcom and UnitedHealth Group on Oct. 15. Microsoft, Alphabet, Goldman Sachs, Qualcomm, Caterpillar, McDonald’s and Western Digital followed on Oct. 19, while Wells Fargo, Cisco, Marvell, Arm Holdings, Moderna and Intuit were named in an Oct. 23 update. Intel, Oracle, IBM and IonQ raised the total to 26, before JPMorgan Chase, Coca-Cola, Dell Technologies, Advanced Micro Devices, Adobe, Applied Materials and Sandisk brought it to 33. The notices do not disclose the reasons for the objections.

The issuer count reached 33 after the venue’s original Oct. 4 notice proposed tokenized versions of 63 stocks from 62 companies. Thirty of those original companies have objected, although not all objectors were included in the initial roster. Under the Securities and Exchange Commission’s Sept. 17 innovation exemption, a Tokenized Securities Venue must give an issuer written notice and 30 days to object before offering third-party tokenized shares. A timely objection prevents that venue from making the affected stock available but does not prevent another venue from seeking to tokenize it.

OKXICE TSV plans to operate 24/7 through permissioned Uniswap v4 liquidity pools on OKX’s XLayer blockchain, with trades settled in Tether’s USDt (USDT), Circle’s USDC (USDC) or Global Dollar (USDG). Under the third-party model, a tokenizer holds actual shares one-for-one through a registered broker-dealer and issues tokens intended to carry the same dividend and voting rights as regular shares. An updated notice also allows stocks to be tokenized by the issuer itself. The venue is not registered with the SEC, is not subject to Regulation NMS or fair-access requirements, and may update its smart contracts without advance notice. Its notices also state that it is uncertain whether tokenized shares held in self-custodied wallets would qualify as customer property or receive Securities Investor Protection Corporation protection if a tokenizer’s broker-dealer failed.

Nasdaq, which won SEC approval earlier this year for its own tokenized securities pilot, has opted its shares out of the innovation exemption framework. A spokesperson told The Wall Street Journal that Nasdaq does not want its stock trading on a venue that does not show the best prices in real time or report trades to the consolidated tape. OKXICE co-chair and former New York Governor Andrew Cuomo characterized the issuer actions differently, saying they were “not objections” and adding: “There are going to be a lot of companies that say ‘we don’t want to be the first, we wanna see how it goes’ [...] that is 100% to be expected, and there will be more.”

Robin Nordnes, CEO of trading validation platform Raiku, said issuers were concerned about price discovery onchain. “Issuers aren’t objecting to the blockchain. They’re objecting to not knowing what happens to their price once it trades there,” he told Cointelegraph. “On a public chain, the validator building the block sets the order. Until desks can measure their distance to that point, best execution is a promise, not a number.” The International Monetary Fund has found real demand for tokenized stocks, particularly outside traditional market hours, while warning that the market remains volatile and illiquid.