SEC tokenized stock framework faces issuer pushback as Broadcom, Verizon object to OKX-ICE listing

The SEC’s new framework for trading tokenized stocks is encountering resistance from some of the companies whose shares could trade, with Broadcom (AVGO), Verizon (VZ) and UnitedHealth (UNH) among the latest issuers to object.

Eight newly disclosed objections appeared in an October 15 public notice from OKXICE, the joint venture between crypto exchange OKX and New York Stock Exchange parent Intercontinental Exchange (ICE) preparing to offer tokenized stock trading.

Alongside Broadcom, Verizon and UnitedHealth, the notice names AppLovin (APP), Applied Digital (APLD), Rocket Lab (RKLB), CoreWeave (CRWV) and Applied Optoelectronics (AAOI).

It lists nine objecting issuers in total, including AI chipmaker Cerebras Systems (CBRS), which formally opted out of being listed earlier. The update did not disclose why the companies objected or when they submitted their notices.

Nasdaq (NDAQ) has separately said it would opt out of having its own shares tokenized under the framework, according to an FAQ on its website.

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, which aggregates stock-market trading data. Nasdaq is not among the nine issuers named in OKXICE’s notice.

Path to onchain stock trading

OKXICE announced on October 5 that it had notified the U.S. Securities and Exchange Commission of plans to launch the venue, initially targeting shares of 63 U.S.-listed companies. Former New York Gov. Andrew Cuomo, the venture’s co-chair, announced the move on X.

The venue would operate under the SEC’s five-year “Innovation Exemption,” issued September 17, which allows qualifying platforms to trade tokenized U.S. stocks using automated market makers and liquidity pools.

Tokenized stocks are blockchain-based representations of shares. OKXICE plans to operate around the clock using Uniswap v4 liquidity pools on OKX’s XLayer blockchain, with trades settled in stablecoins.

Under the model described in its notice, underlying shares would be held one-for-one against outstanding tokens through a registered broker-dealer. Token holders must receive equivalent rights, including dividends and voting rights.

Issuer doubts

The issuer pushback echoes findings from TD Securities analysts led by Reid Noch, vice president of U.S. equity market structure.

Conversations with dozens of issuers showed “little interest in tokenizing their shares outside a small group of crypto-adjacent companies,” the analysts wrote in a report shared with CoinDesk. Several issuers also approached the firm with significant concerns after discovering the framework, having been unaware of it when it was announced, the report said.

TD Securities named the framework’s reliance on temporary exemptive relief, rather than permanent rules, as its largest hurdle. A future commission could reverse the approach, complicating the case for investing in infrastructure and discouraging institutions from integrating with venues even after they launch, the analysts said.

That uncertainty is especially challenging when overseas platforms can continue offering synthetic stock products without assuming the operational requirements of the U.S. relief, they added.