9 firms opt out of OKXICE tokenized stocks after ‘reviewing and weighing’ risks

Broadcom, CoreWeave, and Cerebras Systems are among the nine firms that have objected to their tokenized stock versions being traded on the OKXICE platform. 

Other objectors include AppLovin, Applied Digital, Verizon, Rocket Labs, Applied Optoelectronics, and UnitedHealth Group. The OKXICE platform is co-owned by Intercontinental Exchange (ICE) and crypto exchange OKX. ICE is also the NYSE (New York Stock Exchange) parent company. 

The platform filed to tokenize the top 63 U.S. stocks via permissioned Uniswap V4 pools under the SEC’s ‘Innovation Exemption’ framework.  Under the rules, firms had 30 days to object to the proposal, or silence would be deemed consent. 

That’s the window Broadcom and others used to opt out of the OKX-backed tokenization push. Applied Optoelectronics said it was unsure about the potential impact of the move on its traditional share price, liquidity, and volatility. 

Nasdaq also slammed the move, raising questions about how the SEC will push its tokenization agenda.

Nasdaq opposes the OKX tokenized stocks model

Nasdaq, a NYSE rival, has opted out of the SEC’s allowing its shares (NDAQ) to trade on tokenized stock venues (TSVs), per its FAQs. 

As an issuer ourselves, having carefully reviewed and weighed these current considerations of the Innovation Exemption, we intend for Nasdaq, Inc. (Nasdaq: NDAQ) to opt out of TSVs.

A Nasdaq spokesperson told The Wall Street Journal (WSJ) they are committed to tokenization. But maintained that Nasdaq doesn’t want its tokenized stock to trade on venues that do not display the “best prices in real time.”

The OKX-backed platform is just one of the TSVs. Nasdaq fears TSVs could distort price discovery and fragment liquidity if they sit outside the National Market System (NMS). The IMF raised similar liquidity concerns. 

According to Nasdaq, companies should issue their own tokenized stocks and have more control over where and how they trade. Simply put, it opposes the OKXICE model. The model allows TSVs to offer ‘wrappers.’ In return, a third party buys real shares as backing for the issued tokenized stocks.

Interestingly, Nasdaq has partnered with Kraken to offer tokenized stocks. But their model allows companies to directly issue the tokens. So, two rivals are pushing for two different models for tokenized stocks. 

It remains to be seen whether others will oppose the move and which model will be adopted by the market. 

In the meantime, tokenized stocks have hit $3.4B in market supply and over $10B in monthly transfer volume. That translates to 1% of stablecoin supply and strong adoption despite growing opposition from select traditional firms and exchanges. 

Final Summary

• Nine firms opted out of OKXICE’s planned tokenized stock trading, citing liquidity and price volatility risks 
• Nasdaq calls for a model where companies have more control over their tokenized stocks and where they are traded.