Microsoft, Alphabet and Goldman Sachs object as OKX-ICE tokenized-stock venue tests issuer silence

Big names opt out

An updated notice dated Monday added seven more objecting companies to the list for a new tokenized-stock venue, including Microsoft, Alphabet and Goldman Sachs ^[1]. If you run or advise a listed company, the notice matters to you because silence lets trading begin ^[2].

The seven newest objecting names are Microsoft, Alphabet, Goldman Sachs, Qualcomm, Caterpillar, McDonald's and Western Digital ^[3]. Another account says Microsoft, Alphabet, Goldman Sachs, McDonald's and three others objected on Monday, and Wells Fargo, Cisco and four more firms objected on Friday ^[2].

The first public notice, dated Oct. 15, listed nine objecting companies ^[3]. They included Verizon, Broadcom, UnitedHealth Group, CoreWeave and Rocket Lab ^[1].

How the venue and the exemption work

The SEC exemption was unveiled in September after the Clarity Act stalled in the Senate ^[1]. It lets venues trade tokenized U.S. stocks without registering as exchanges ^[1].

OKX and Intercontinental Exchange (ICE), which owns the New York Stock Exchange, are building the tokenized-stock venue ^[2]. The venue plans to run 24/7 on Uniswap v4 liquidity pools on OKX's XLayer blockchain, with trades settled in stablecoins such as USDC and USDT ^[1]. According to the notice, OKX-ICE is not subject to Regulation NMS or fair-access rules ^[1].

Before trading a company's shares, a venue must notify the issuer and give the issuer 30 days to object ^[2]. If the company stays silent, trading can begin ^[2]. The 30-day objection window is estimated to close in early November ^[3].

What a tokenized share is

A tokenized share is a digital token on a blockchain that stands in for one real share of a company, with a licensed broker holding the actual share ^[3]. Under the third-party model, an outside tokenizer buys and holds real shares one-for-one through a registered broker-dealer ^[1]. It then issues tokens meant to carry the same dividend and voting rights ^[1].

The Monday notice changed the offering model ^[1]. The venue will offer stocks tokenized by either an outside party or the issuer itself, instead of only unaffiliated third parties ^[1].

Why silence carries weight

Latham & Watkins warned issuers that silence effectively becomes an irrevocable decision ^[2]. The reason is that the SEC order provides no mechanism to object after the 30-day window or withdraw a prior non-objection once trading begins ^[2].

Olivia Vande Woude of Ava Labs said the list of objectors is likely to keep growing, because objecting costs nothing while silence counts as consent ^[2]. Dave Hendricks, CEO of Vertalo, said most of the companies had no idea a third party had tokenized their stock until the OKX-ICE notice went up ^[2].

Reactions and open questions

None of the objecting companies has explained its decision, and the notice gives no reasons ^[3]. Cerebras objected even though it was not on OKX-ICE's original list ^[3]. Goldman Sachs has spent years building its own tokenization business ^[3].

Andrew Cuomo, OKX-ICE co-chair, called the corporate objections a natural response ^[2]. TD Securities' Reid Noch said the upside for issuers remains difficult to quantify ^[2]. Securitize CEO Carlos Domingo said there is an important education process underway for issuers ^[2].

Nasdaq said it intends to object to having tokenized versions of its own stock traded on TSVs under the current exemption ^[2]. It warned that TSVs outside the National Market System could fragment liquidity, weaken price discovery and lack safeguards ^[2]. The IMF recently warned that tokenized stock markets remain volatile and illiquid despite real demand ^[1].

Securitize told CoinDesk it does not plan to object to inclusion on the OKX-ICE venue ^[2]. BitGo said in an email that the company won't object to the listing ^[2].