SEC Tokenized Stock Framework Hits Resistance: Nine Issuers Including Broadcom and Verizon Object to Listing, and Nasdaq Opts Out

What happened

Per CoinDesk, Broadcom, Verizon and UnitedHealth are among nine objecting companies. They do not want their shares traded on the tokenized stock platform OKXICE is planning. Tokenized stocks represent shares as digital tokens on a blockchain; issuers are the listed companies that issue those shares.

CoinDesk reports that OKXICE is a joint venture between crypto exchange OKX and Intercontinental Exchange (ICE), the parent of the New York Stock Exchange. A public notice OKXICE published on Oct. 15 disclosed eight new objections. Besides Broadcom, Verizon and UnitedHealth, the notice names AppLovin, Applied Digital, Rocket Lab, CoreWeave and Applied Optoelectronics. It lists nine objecting issuers in total, including AI chip company Cerebras Systems, which had already formally opted out earlier.

CoinDesk says the update did not explain why these companies objected or when they submitted their notices.

How the platform would work

According to CoinDesk, OKXICE announced on Oct. 5 that it had notified the U.S. Securities and Exchange Commission (SEC) of its launch plan, initially targeting shares of 63 U.S.-listed companies. The platform would operate under the SEC's five-year "innovation exemption," issued on Sept. 17. The exemption lets eligible platforms trade tokenized U.S. stocks using automated market makers and liquidity pools. An automated market maker is a mechanism that quotes and executes trades by program, and a liquidity pool is a shared pool of funds used for trading.

CoinDesk explains that OKXICE plans to run around the clock, using Uniswap v4 liquidity pools on OKX's XLayer blockchain, with settlement in stablecoins. Stablecoins are cryptocurrencies designed to hold a stable value. Under the model described in the notice, each token in circulation would be backed by one corresponding share held by a registered broker-dealer, a firm licensed to buy, sell and hold securities. Token holders must receive equivalent rights, including dividends and voting rights.

Nasdaq's and analysts' concerns

Per CoinDesk, Nasdaq said in an FAQ on its website that it will opt out of having its own shares tokenized under the framework. A Nasdaq spokesperson told the Wall Street Journal that the company does not want its shares trading on a venue that does not display best prices in real time or report to the consolidated tape (the system that aggregates stock trading data). CoinDesk notes that Nasdaq is not among the nine issuers named in OKXICE's notice.

CoinDesk cites a report by TD Securities analysts led by Reid Noch. After speaking with dozens of issuers, the analysts found little interest in tokenizing shares outside a small group of crypto-related companies. The report also says several issuers were unaware of the framework when it was announced and contacted the firm with significant concerns once they learned of it.

TD Securities sees the biggest obstacle as the framework's reliance on a temporary exemption rather than permanent rules. The analysts say a future commission could reverse the approach, which would complicate the case for investing in infrastructure and discourage institutions from connecting to these venues even after they launch. They also note that overseas platforms can keep offering synthetic stock products without taking on the operating requirements the U.S. exemption imposes.

What this means for ordinary readers

For ordinary readers, the news shows that even when a regulator opens the door, which stocks can be listed still depends on whether issuers are willing. Based on CoinDesk's reporting, the objection list and analysts' concerns may narrow the range of stocks the platform can offer. In addition, the framework is a temporary exemption, so whether policy will continue remains uncertain.

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