SEC and Tokenized Stocks: Broadcom, Verizon and Others Object to OKX-ICE Listing
The SEC's plan to legalize trading of tokenized stocks has hit resistance from an unexpected quarter: the very companies whose shares were set to go on-chain. Five more issuers joined the objectors list within days.
Who's objecting, and to what
OKXICE, a joint venture between exchange OKX and Intercontinental Exchange, NYSE's parent company, published a notice on October 15 with a new list of objections. It includes Broadcom (AVGO), Verizon (VZ), UnitedHealth (UNH), AppLovin (APP), Applied Digital (APLD), Rocket Lab (RKLB), CoreWeave (CRWV) and Applied Optoelectronics (AAOI). Ninth on the list is AI chipmaker Cerebras Systems (CBRS), which formally declined listing earlier than anyone else.
The notice doesn't say why these companies object. The dates their objections were filed aren't disclosed either.
Nasdaq (NDAQ) sits apart from this list. According to a spokesperson quoted by the Wall Street Journal, the exchange doesn't want its shares on a venue that doesn't display best prices in real time and doesn't report to the consolidated tape, the market's aggregated trade data feed.
How the platform is supposed to work
OKXICE announced its plans on October 5 and notified the SEC immediately. At launch it would cover shares of 63 US companies. Andrew Cuomo, former New York governor, is a co-founder and co-chair of the project.
The platform is counting on a five-year "Innovation Exemption" that the SEC granted on September 17. It allows trading tokenized securities through automated market makers and liquidity pools. The underlying shares are to be held by a registered broker-dealer on a one-to-one basis with issued tokens. Holders get dividends and voting rights, settlements run in stablecoins, and liquidity comes from Uniswap v4 on OKX's XLayer blockchain. Trading is around the clock.
Why issuers are wary
Analysts at TD Securities, led by Reed Nolte, VP of US equity market structure, spotted similar sentiment earlier. In a report for CoinDesk they write that after surveying dozens of issuers, the team saw interest in tokenization only among a narrow group of companies close to the crypto industry. Some issuers had no idea the framework existed until they learned about it themselves.
TD Securities' main concern is the temporary nature of the exemption. A new SEC commission could reverse course, putting infrastructure investments at risk.
The analysts add that institutions won't rush to integrate with such venues until the rules become permanent. Abroad, meanwhile, synthetic stock products can trade without US operational requirements, which makes for an uneven playing field.
What's next
The math is simple: the more issuers refuse, the fewer securities are available for tokenized trading. Nine refusals are already in, and Nasdaq's position stacks on top. If the SEC doesn't convert the framework into permanent rules, the around-the-clock blockchain stock market in the US may never leave the drawing board.
