Only Six Crypto Firms Have Not Objected to OKXICE Tokenizing Their Stock
Key Takeaways
- •Sixty-seven companies have objected to OKXICE tokenizing their shares, and the only firms on its original list that have not objected—Strategy, Robinhood, Coinbase, Circle, BitGo and Securitize—are all crypto businesses.
- •An SEC 'innovation exemption' issued on September 17 allows OKXICE to trade tokenized versions of listed stocks without registering as an exchange, while issuers have 30 days after notification to file a written objection, with silence counting as consent.
- •OKXICE plans to offer around-the-clock trading, with each token paired with USDC, USDG or USDT in permissioned liquidity pools on the X Layer network.
- •Robinhood CEO Vlad Tenev has argued against issuer vetoes, contending that a token which does not change shareholder rights, company duties or the official stock record should not need a company's approval.
- •Despite the wave of objections, Securitize recently launched tokenized U.S. stocks that are expected to trade on OKXICE.
Only six crypto companies on OKXICE's list have not blocked the venue from tokenizing their shares, as the number of objectors has climbed to 67.
OKXICE is a joint venture between crypto exchange OKX and Intercontinental Exchange (NYSE: ICE), the owner of the New York Stock Exchange. Its original notice listed 62 companies, and 56 of them have objected as of this report.
Which companies have not objected to OKXICE's stock tokens?
Of all the companies OKXICE said it planned to tokenize, only six have not objected, and all six are crypto businesses: Strategy (NASDAQ: MSTR), Robinhood (NASDAQ: HOOD), Coinbase (NASDAQ: COIN), Circle (NYSE: CRCL), BitGo (NYSE: BTGO) and Securitize. Every holdout operates in the crypto sector, while the objectors span retail, technology, healthcare, aerospace and other industries, including Walmart, UnitedHealth and Boeing.
When OKXICE filed its notice on October 4, the list contained more than 60 stocks, with big names like Nvidia (NASDAQ: NVDA), Tesla (NASDAQ: TSLA), Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT). Many of those companies have since objected.
Broadcom (NASDAQ: AVGO), Verizon (NYSE: VZ) and UnitedHealth Group (NYSE: UNH) were the first to object. By October 28 there were 38 objectors, including Walmart (NASDAQ: WMT). The count reached 50 on October 30, with Nvidia, Costco (NASDAQ: COST) and Nike (NYSE: NKE) among them. A notice dated November 2 raised the total to 56, adding Tesla, Amazon (NASDAQ: AMZN) and Netflix (NASDAQ: NFLX) to the list.
Cryptopolitan reported that 59 companies had objected after OKXICE's November 3 notice, when Apple, Home Depot (NYSE: HD) and GE Vernova (NYSE: GEV) opted out. On Thursday, Nebius (NASDAQ: NBIS), Boeing (NYSE: BA) and ServiceNow (NYSE: NOW) reportedly objected, bringing the total to 62. On Friday, five more companies pushed it to 67: Palantir (NASDAQ: PLTR), S&P Global (NYSE: SPGI), KLA (NASDAQ: KLAC), Super Micro (NASDAQ: SMCI) and Meta (NASDAQ: META).
Of the 67 objectors, 56 were on OKXICE's original list of 62 companies. The rest, including Cerebras and Nebius, were never on it.
OKXICE plans to offer trading around the clock. Each token would be paired with USDC, USDG or USDT in permissioned liquidity pools on the X Layer network, a structure that restricts pool access to approved participants. Co-chair Andrew Cuomo, the former New York governor, called the project a first step. He told the Wall Street Journal that he expects companies to be wary of tokenizing their stock.
Why can companies block their stock from being tokenized?
The right for companies to object comes from an SEC “innovation exemption”, a five-year order issued on September 17. It lets a tokenized securities venue trade token versions of listed stocks without registering as an exchange.
When a third party, rather than the company itself, wants to tokenize a stock, the venue must notify the company at least 30 calendar days before trading starts. The company then has 30 days to file a written objection. Silence counts as consent. An objection applies only to the venue that sent the notice, so each new platform restarts the clock. A company can still issue its own blockchain-based securities. Under those rules, the final list of stocks OKXICE can tokenize depends on whether the remaining companies stay silent through their 30-day windows, and any future tokenization platform would have to notify these companies again, restarting the objection clock for each stock.
A spokeswoman for Applied Optoelectronics (NASDAQ: AAOI) explained that the company refused because it could not tell how tokens would affect its share price, trading volume or volatility. She also worried that investors would assume the company had sponsored the token.
Nasdaq (NASDAQ: NDAQ), which was not on OKXICE's list, said it would keep its own shares off venues that do not show real-time best prices or report to the consolidated tape.
Robinhood CEO Vlad Tenev has pushed back on the idea of a company veto. He argued in September that a token that does not change shareholder rights, company duties or the official stock record should not need the company's approval. His comments followed criticism from AMC Entertainment (NYSE: AMC) CEO Adam Aron over Robinhood's stock tokens. The exchange frames a central question for tokenized equities: how much say issuers should have over third-party tokens that track their shares.
Amid the objections, Securitize recently launched tokenized U.S. stocks, and those tokens are expected to trade on OKXICE.
