Nine corporations push back against tokenized share initiative from OKX-ICE partnership
A group of nine corporations has formally opposed the tokenization of their shares on the blockchain platform being developed jointly by OKX and ICE, the parent entity of the New York Stock Exchange.
A total of nine publicly traded corporations have submitted formal objections to the planned tokenization of their stocks on the proposed digital asset platform being developed through a partnership between OKX and Intercontinental Exchange (ICE), which serves as the parent organization of the New York Stock Exchange (NYSE).
The list of objecting entities encompasses Cerebras Systems, AppLovin, Applied Digital, Rocket Lab, CoreWeave, Verizon Communications, Applied Optoelectronics, Broadcom and UnitedHealth Group, based on a Thursday announcement from OKX and ICE.
The announcement provided no explanation regarding the motivation behind the companies' objections. According to the Securities and Exchange Commission's innovation exemption directive issued on Sept. 17, tokenized trading venues are required to provide issuers with written notification and the chance to object prior to listing third-party tokenized securities.
Issuers aren't objecting to the blockchain. They're objecting to not knowing what happens to their price once it trades there. On a public chain, the validator building the block sets the order. Until desks can measure their distance to that point, best execution is a promise, not a number.
Robin Nordnes, CEO of trading validation platform Raiku
The formal objections underscore a possible obstacle for the tokenized stock market and present a test case for whether cryptocurrency platforms can establish blockchain-powered marketplaces for publicly traded company shares absent issuer consent.
Cointelegraph has reached out to OKX seeking commentary regarding the implications of these objections but had not yet received a reply at the time this article was published.
Tokenized stock offerings need more real-world data to address pricing discrepancy concerns
Corporations require evidence of the "upside and a track record of efficient pricing," according to Misha Putiatin, co-founder of collateral markets platform Symbiotic, in his conversation with Cointelegraph, further noting that additional "real-world data would help everyone assess the benefits and risks."
According to Putiatin, supplementary institutional tokenization programs, including the Depository Trust and Clearing Corporation's (DTCC) tokenization offerings, have the potential to build greater confidence in tokenized securities.
Luke Nolan, senior research associate at CoinShares, indicated that the objection should not be interpreted as an outright rejection of the tokenization concept itself, but rather opposition to being tokenized in the absence of explicit consent. In his statement to Cointelegraph, he explained:
This veto also seems to be venue-specific, as in companies being able to say: no, I don't want them offered on this venue, but I could permit/launch it somewhere else.
Luke Nolan, CoinShares senior research associate
According to Nolan, the concerns raised by these companies carry legitimacy, noting that market participants have in the past exploited particular market mechanics to engineer "squeezes" or "short-term swings" in the price of the underlying asset.
Over the preceding 30 days, more than $754 million in capital has migrated onchain, driving the combined total across stablecoins and tokenized assets to reach $320 billion, based on data from OnchainBenchmark.