Elon Musk's SpaceX Rejects OKXICE Tokenized Share Proposal Amid Growing Offshore Token Markets
The aerospace giant has become the latest company to oppose tokenized share listings on OKXICE, following months of substantial trading activity for tokens linked to its stock on cryptocurrency exchanges.
Following a period during which tokenized representations of SpaceX equity emerged as a dominant force in blockchain-based stock trading, the space exploration company is now resisting efforts to introduce comparable trading options to American investors.
Based on a Nov. 2 public announcement from OKXICE, the aerospace firm has formally raised objections to the planned introduction of tokenized representations of its equity on the platform, which operates as a collaborative effort between cryptocurrency platform OKX and Intercontinental Exchange (ICE), the organization that owns the New York Stock Exchange. SpaceX is now part of a group of 56 corporations, including Tesla and Amazon, that have voiced opposition to these planned token listings.
Through the Securities and Exchange Commission's Innovation Exemption framework with a five-year duration that was launched in September, venues like OKXICE are permitted to facilitate trading in tokenized forms of American equities without the requirement to register as national securities exchanges. However, this regulatory structure also provides corporations with input in the matter: Companies are granted a 30-day window to register objections to third-party tokenization and proposed trading of their equity, which effectively prevents such tokens from appearing on the platform.
Tokenized equities represent blockchain-powered digital versions of corporate shares that enable market participants to obtain exposure to conventional stock market investments through blockchain technology, frequently with 24/7 availability. The underlying structure may vary, with some being supported by genuine shares, though the privileges afforded to token owners may not match those enjoyed by conventional equity holders.
Andrew Cuomo, OKXICE co-chair and former Governor of New York, shared with Cointelegraph on Oct. 20 that the joint venture anticipated additional objections as corporations were reluctant to be pioneers in experimenting with this innovative model.
The objection filed by SpaceX arrives even as tokenized forms of its equity are currently available for trading on international platforms operating beyond US jurisdiction, where these instruments have generated considerable trading volumes following the company's public offering in June.
Offshore trading since June
Prior to the potential SpaceX listing, two platforms prepared tokenized instruments: Backpack Securities, which operates as both a stock brokerage and tokenization service, and cryptocurrency exchange Kraken through its xStocks product line, each creating tokenized versions of the aerospace corporation's shares intended to be supported by genuine equity holdings. The SPCX token from Backpack subsequently achieved $1.08 billion in blockchain-based trading volume during June, whereas Kraken's SPCXx token generated $852 million in volume.
In contrast to the offerings from Backpack and Kraken, OKXICE's platform would provide American investors with access to tokenized equity trading under the SEC's recently introduced regulatory structure, potentially accessing the planet's most substantial equity market measured by capitalization and broadening the pool of investors for tokenized financial instruments.
In September, Nasdaq issued a cautionary statement to companies, emphasizing that they "must be cautious about their participation" in this joint venture, contending that tokenized equity trading has the potential to fragment market liquidity and damage shareholder value over the long term.
Notwithstanding the increasing resistance, Cuomo stated at an Oct. 30 press conference that as individuals begin to recognize the advantages of tokenization, "you'll see more and more companies participate."