Newsletter

• The total number of issuers that raised objections has increased from 9 on October 15 to 26, but the relevant notice does not explain the content of the objections nor does it clarify their impact.
• The resistance in the tech industry to tokenized stocks continues to grow.

A joint venture platform, jointly owned 50% by Intercontinental Exchange ( Intercontinental Exchange ), the parent company of the New York Stock Exchange, and OKX US Holdings Corporation, now lists 26 issuers that have raised objections.

This number is higher than the 22 companies mentioned in their notice on October 23; at that time, Wells Fargo, Cisco, and Marvell were added to the list. On October 19, the total number was 16, and on October 15, it was 9. The initial list included Verizon, Broadcom, and UnitedHealth Group. In less than two weeks, this list has almost tripled in size.

The list mainly consists of technology companies. Microsoft, Alphabet, Broadcom, Qualcomm, Arm, Cisco, as well as current players like Intel and Oracle have all raised objections. In addition, there are also two banks: Goldman Sachs and Wells Fargo.

IBM and IonQ have added two more quantum computing companies to the list. As before, these notifications do not explain the reasons behind these companies being included, nor do they clarify what it means to "raise objections" regarding whether a particular stock can be traded on that platform.

OKXICE TSV allows approved users to trade tokenized U.S. stocks 24/7 through the licensed Uniswap liquidity pool on the XLayer blockchain of OKX, using stablecoins such as USDC.

Users must pass identity and sanctions checks and possess a non-transferable "Soul Binding" (soulbound) token in order to conduct transactions. This trading venue intends to operate under the innovative exemption mechanism of the U.S. Securities and Exchange Commission (SEC); this mechanism was introduced by SEC in September, following the obstruction of Clarity Act in the Senate.

The latest notice also highlighted a key risk faced by investors. Each token represents a claim to a real stock, which is held by a third-party “tokenization institution” through a registered brokerage firm. The notice states that if such a brokerage firm goes bankrupt, there is still uncertainty as to whether the tokenized stocks stored in users’ self-managed wallets will be considered customer property or whether they will be protected by the Securities Investor Protection Corporation (Securities Investor Protection Corporation); this institution typically protects clients of brokerage businesses in the event of a firm’s bankruptcy.

The notification also states that transactions must be funded in full; no margin or borrowing is allowed. Liquidity providers do not have to be registered market makers, and they can withdraw their liquidity at any time.

OKX and ICE first collaborated in the area of tokenized securities earlier this year and announced plans for this trading platform this month.