Nine Companies Opt Out of Tokenized Stocks on OKXICE

Nine companies have opted out of having their shares traded on the planned OKXICE venue, where stocks are meant to appear as blockchain tokens. Broadcom, Verizon and UnitedHealth are among them. The new wave of objections shows that the SEC's rules for tokenized stocks still depend on the goodwill of the issuers themselves.

What exactly happened with OKXICE?

On October 15, OKXICE published a notice listing companies that do not want their shares traded on the platform. OKXICE is a joint venture between the crypto exchange OKX and Intercontinental Exchange (ICE), the owner of the New York Stock Exchange. The list has eight new names, namely Broadcom, Verizon, UnitedHealth, AppLovin, Applied Digital, Rocket Lab, CoreWeave and Applied Optoelectronics. The ninth is Cerebras Systems, which opted out earlier.

The idea is fresh. On October 5, OKXICE notified the SEC that it planned to launch the venue, initially targeting shares of 63 US-listed companies. The venture's co-chair, former New York Governor Andrew Cuomo, announced it on X. Only ten days passed between that first announcement and the public list of objections.

The notice does not say why they objected. It gives no filing dates either. Applied Optoelectronics told the Wall Street Journal that it was unsure how tokenization would affect the price, liquidity and volatility of its stock.

How does a tokenized stock work?

A tokenized stock is a blockchain record that matches one real share. Trading in such tokens is supposed to run around the clock, not only during exchange hours, and that is the main difference from an ordinary brokerage account. The asset itself differs too. The investor gets not a share in their account but a token whose rights are guaranteed by a broker-dealer.

The setup has several parts.

• Backing: each token is matched by one share held by a registered broker-dealer.
• Token holders are supposed to get the same rights as owners of the shares themselves, meaning dividends and voting.
• Prices come from automated market makers and liquidity pools on Uniswap v4 on OKX's X Layer network, not from an order book like on a regular exchange.
• Trades settle in stablecoins like USDT.

An automated market maker (AMM) is a smart contract that holds two assets in a pool, for example a stock token and a stablecoin, and sets the price by formula based on the balance between them. A buyer does not need a seller, because they trade against the pool. At night and on weekends, when the New York exchange is closed, such trading continues, and the token price can drift from the exchange price because the pool reacts only to trades inside itself.

Why does the SEC lean on a temporary exemption?

It all rests on the Innovation Exemption, a five-year carve-out the SEC issued on September 17. It lets qualifying platforms trade tokenized US stocks through automated market makers and liquidity pools. It is not a law and not a final rule, just a temporary concession. The SEC does not change the law, it lets platforms that meet the conditions operate under eased requirements for up to five years. When the term runs out or the commission changes its mind, the rules could look different.

That worries the TD Securities analysts led by Reid Noch, who covers US equity market structure. They spoke with dozens of issuers. In their words, only a handful of crypto-adjacent companies show any interest in tokenizing. Some learned about the framework only after it was announced and came to the bank with serious questions.

The analysts named the temporary nature as the biggest obstacle. A different commission could reverse the approach, and any money spent on infrastructure would be at risk.

For the company itself there is a practical worry. If tokens of its shares trade on an outside venue, part of the price and liquidity is shaped by a structure the issuer does not control. So the Applied Optoelectronics question about volatility is a very practical one.

Why did Nasdaq join the objections?

Nasdaq said separately that it would opt out of having its own shares tokenized under this framework, according to an FAQ on the exchange's website. A Nasdaq spokesperson told the Wall Street Journal that the company does not want its shares on a venue that fails to show best prices in real time and does not report to the consolidated tape, which gathers trade data across the whole stock market. Nasdaq is not on the OKXICE list, so this is a separate refusal. Its stance stands out because it comes from an exchange, not from a single issuer.

There is also a competition argument. Overseas platforms can still offer synthetic stock products without meeting the operational requirements the US sets for participants in the exemption, the TD Securities report says. The regulated venue enters the market under stricter rules than its rivals.

That is a weak position to start from.

What should people watching tokenization expect?

There is no trading yet. OKXICE has only notified the SEC of its plans, so the list of 63 companies could shrink if more objections come in. How many stocks make it to launch depends on the issuers.

For people who hold stablecoins, tokenized stocks could become one more way to use them. We at Kurslog watch such launches because settlement there happens in stablecoins. But access will depend on how many companies agree. Three things are worth watching: new OKXICE notices naming objectors, the SEC's reaction and decisions by other big issuers.

For the crypto market, the takeaway is simple. Moving ordinary stocks onto a blockchain depends on more than technology and the regulator. The companies still have to decide, and most of them are in no hurry.