Regulatory Green Light, Yet OKXICE Faces Boycott from 90% of US Equity Companies

Original | Odaily@OdailyChina)

Author | Golem (@web3_golem)

Today, the biggest obstacle to tokenized stocks is no longer regulators—it is the publicly listed companies themselves.

According to a notice published by OKXICE on November 2, the number of companies opposing OKXICE's launch of tokenized stocks has grown to 56, including popular US stocks such as Amazon, Tesla, SpaceX, and Nvidia. The dissenting companies account for 90% of the 62 companies initially proposed for inclusion. These 56 companies have a combined market capitalization exceeding $31 trillion, roughly 42% of the total US stock market capitalization.

As of press time, 13 companies have not raised objections to OKXICE, including Apple, Strategy, Robinhood, Coinbase, Palantir, Circle, Securitize, BitGo, ServiceNow, GE Vernova, Boeing, Home Depot, and Super Micro Computer. Securitize and BitGo had previously indicated they do not intend to object.

OKXICE is a joint venture between cryptocurrency exchange OKX and Intercontinental Exchange (ICE), planning to launch stock tokens on X Layer. However, under the US SEC's innovation exemption policy for stock tokenization, listed companies have the right to object to third-party stock token platforms within 30 days.

OKXICE issued its initial announcement on October 4. If OKXICE sent written notices to the 62 companies on that same day, then by the deadline (November 3), only two companies had expressed explicit support while 90% explicitly opposed. Under SEC rules, OKXICE can ultimately list only 13 US stock tokens.

Although the 30-day objection period starts from the date listed companies receive written notice—meaning November 3 is not necessarily the deadline for all companies to file objections—for OKXICE, being able to list 13 stock tokens is already the best possible outcome at present.

What Are Listed Companies Worried About?

So why are these listed companies so resistant to third-party platforms trading their stocks? After all, on the surface, stock tokenization provides listed companies with a new trading channel that could theoretically expand their investor base, extend trading hours, and even bring more liquidity to their stocks. This is also the main argument touted by the market in favor of stock tokenization.

But for issuers, more trading channels do not necessarily mean an improved trading ecosystem.

From the perspective of third-party platforms like OKXICE, the more stock tokens they can list, the better—the richer the underlying assets, the more they can satisfy different users' investment needs, the easier it is to achieve economies of scale, and the more capital and traders they can attract. But from the perspective of listed companies/issuers, launching stock token trading on a trading system where they lack direct control and which operates relatively independently from traditional securities markets presents risks that far outweigh the incentives.

Based on the objections raised by listed companies so far, the core concerns center on three areas: price and liquidity fragmentation, reduced visibility of trading activity, and the possibility that third-party trading outcomes could in turn damage issuers' market reputation.

Price and Liquidity Fragmentation

In traditional stock markets, trading in a stock is primarily concentrated on its listing exchange and related securities markets, allowing investors to observe prices, trading volumes, and order book changes through a relatively unified market data system. But if third-party platforms also begin issuing and trading corresponding stock tokens, the same company could have multiple trading prices and volume data simultaneously.

Even if stock token prices are anchored to the underlying share price, it does not mean the quotes on both sides will always remain consistent. When differences arise in trading hours, bid-ask depth, and arbitrage efficiency across different markets, price deviations between tokens and underlying shares may occur.

At the same time, for the US stock market—which has the greatest "capital dominance" globally—most listed companies and issuers are inherently skeptical of the argument that stock tokens can attract more investors. They tend to believe that stock liquidity will not automatically increase simply because an on-chain trading channel is added, and that it could even have the opposite effect.

If trading demand originally concentrated in traditional securities markets is diverted to multiple platforms, it could reduce order book depth across various markets and widen bid-ask spreads. For listed companies/issuers, this liquidity fragmentation could ultimately weaken price discovery efficiency.

Stephen Wink, Global Co-Chair of Latham's Fintech Industry Group, has noted that if trading volume for such stock tokens is low, a major concern for listed companies is price dislocation, which could put pressure on the underlying share price and send misleading signals to the broader market.

Reduced Visibility of Trading Activity

Second, listed companies worry that their real-time understanding of stock trading activity will be affected.

Traditional securities markets have relatively mature market data disclosure and trade reporting systems. Listed companies, investors, and regulators can observe stock transaction prices and volumes through established channels. But when stock tokens trade independently on third-party platforms, this data may not be fully incorporated into the consolidated market data systems of traditional markets.

However, stock token trading on third-party platforms cannot be directly integrated into the securities market data systems that issuers originally rely on. If liquidity does indeed become dispersed to these platforms in the future, listed companies and issuers may be unable to accurately reflect their securities' overall trading conditions across different venues within a single dataset—including trading scale, participant structure, and specific behaviors.

Nasdaq, as an issuer, publicly stated its withdrawal from the TSV tokenization operating framework, believing that the framework would impair issuers' ability to fully, accurately, and timely understand their own securities' prices and trading activity.

Increased Reputational Risk

Under the current innovation exemption policy, listed companies only have the right to object after receiving written notice from a third-party platform. If they do not object within 30 days, it means they tacitly consent to the third-party platform listing stock tokens. This differs from the previous approach where crypto platforms listed US stock trading through SPV structures or directly listed US stock perpetual contracts—if problems arose with US stock tokens/contracts, listed companies could distance themselves by claiming they were unaware or did not approve. But if problems arise with stocks on TSV, listed companies, as tacit consenting parties, could very likely bear partial responsibility.

For example, if a stock token experiences significant price deviation from its underlying shares—or even abnormal volatility—due to insufficient liquidity, limited market-making depth, or the platform's own technical and operational issues, ordinary investors may not carefully distinguish between the legal relationship and trading mechanisms of stocks versus stock tokens, and might directly associate such price performance with the listed company itself.

For listed companies with massive market capitalization and broad investor bases, they are clearly unwilling to bear additional reputational risk simply for the sake of adding one more trading channel.

The Essence Is Still a Conflict of Interest

That said, all of the above issues can be addressed one by one—provided that listed companies and issuers are willing to cooperate with TSV. Based on the current situation, they have no intention of cooperating, and the fundamental reason is a lack of incentives.

For listed companies and issuers, agreeing to let TSV platforms list stock tokens means taking on numerous risks while receiving only one incentive—a new trading channel (of uncertain effectiveness)—while benefits such as control rights and revenue sharing (third parties may capture liquidity/fees) are entirely monopolized by TSV.

Therefore, rather than supporting TSV, listed companies would be better off advancing or supporting issuer-led stock tokenization paths themselves. The US SEC innovation exemption policy's objection right applies only to tokens created by unaffiliated third parties; tokens created by issuers themselves or their agents do not trigger the 30-day objection window.

Nasdaq is a typical example. Although it withdrew from the TSV tokenization operating framework, it is actively advancing Nasdaq Equity Token. Through partnerships with Kraken's parent company Payward and others, Nasdaq has achieved tokenization within the existing exchange framework, ensuring the same CUSIP, same order book, and settlement through a DTC pilot as traditional shares, allowing issuers to retain control over ownership, investor identity, and proxy processes. Nasdaq CEO Adena Friedman said in the Q3 earnings report that the Nasdaq Equity Token plan is expected to launch in the first half of 2027.

Therefore, in the stock tokenization arena, the traditional market forces represented by listed companies and issuers have effectively entered into competition with the emerging market forces represented by crypto companies. Under the US SEC innovation exemption policy, listed companies and issuers will become players who are "both athletes and referees." As long as listed companies actively exercise their objection rights against third-party tokenization, they can protect their control rights and interests while hindering the operations of third-party stock token trading platforms.

This confrontation is not limited to the underlying stock space—Wall Street and crypto companies are also engaged in fierce competition over derivatives. On November 3, the US CFTC approved the listing and trading of US stock perpetual contracts on regulated US exchanges. As soon as the policy landed, the traditional Wall Street camp led by Citadel Securities and the Chicago Board Options Exchange quickly filed a lawsuit in federal court, fundamentally out of concern that perpetual contracts would disrupt the traditional options market. (Related reading: US Makes Historic Move to Allow Stock Perpetual Contracts, Wall Street Giants Are Alarmed)

Now that regulation is no longer the biggest obstacle, the battle for dominance over stock tokenization and the traditional financial revolution may have only just begun.