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JPMorgan, Coca-Cola Join Growing Pushback Against OKX-ICE Tokenized Stocks
Nearly Half of Original Issuers Have Now Opted Out of Planned Trading Venue
TL;DR
- JPMorgan Chase, Coca-Cola, Dell and four other companies joined objections to the planned OKX-ICE tokenized stock venue.
- Disclosed objections have risen to 33, while 30 companies from the original roster have opted out.
- The planned venue would offer tokenized U.S. stock trading under the SEC’s five-year Innovation Exemption.
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JPMorgan Chase, Coca-Cola, Dell Technologies, Advanced Micro Devices, Adobe, Applied Materials and Sandisk have objected to having their shares traded on OKXICE TSV, bringing the disclosed number of objecting issuers to 33. The companies appeared in an updated public notice dated Oct. 27 for the planned tokenized stock venue backed by crypto exchange OKX and NYSE parent Intercontinental Exchange.
Thirty companies from OKXICE’s original roster have now objected, equal to about 48% of that group. Wells Fargo, Arm and Cerebras are among other objectors that were outside the initial selection. JPMorgan is also the third major bank to object after Goldman Sachs and Wells Fargo. Earlier objections have included Microsoft, Alphabet, Intel and Oracle.
The objections have accumulated quickly since the first batch was disclosed. The progression before the latest notice was:
JPMorgan Says It Remains Interested in Tokenization
JPMorgan’s objection does not amount to a rejection of tokenization more broadly. A JPMorgan Chase spokesperson said that the bank remains interested in the technology despite choosing not to participate in the OKXICE venue.
“We are encouraged by the potential of tokenization but also need to be thoughtful about how our shares are represented and traded,” the spokesperson said. “We’ve decided not to participate in this venue at this stage but will continue to evaluate opportunities as the market develops.”
OKXICE’s original Oct. 4 notice proposed 63 tokenized stocks covering 62 companies. Nvidia, Tesla, Apple and Amazon were among major companies that had not objected as of the latest notice. Nasdaq, which received SEC approval for its own tokenized securities pilot, has said it will opt its shares out of the exemption.
The SEC’s Innovation Exemption requires a venue to notify an issuer before offering shares tokenized by an unaffiliated third party. A company can block that venue from making the tokenized stock available by submitting a written objection within 30 days. The objection applies only to the venue receiving it rather than preventing other platforms from offering similar products. The exemption was unveiled in September after the Clarity Act stalled in the Senate.
OKXICE co-chairman Andrew Cuomo previously said many issuers were expected to watch how the market develops before deciding whether to participate. He characterized the SEC experiment as “a sandbox—a model demonstration.”
How the OKX-ICE Tokenized Stock Venue Would Work
OKXICE TSV is structured as a 50-50 joint venture between Intercontinental Exchange and OKX’s U.S. holding company. Approved users would be able to trade tokenized U.S. stocks 24/7 through permissioned Uniswap v4 liquidity pools running on OKX’s XLayer blockchain, with trades paired against stablecoins such as USDC. OKX and ICE first teamed up on tokenized securities earlier this year before announcing the venue this month.
Access would require users to complete identity and sanctions checks and hold a nontransferable “soulbound” token. Trades would have to be fully funded, with no margin or borrowing. Liquidity providers would not have to register as market makers and could withdraw liquidity at any time.
Each token would represent a claim on a real share held through a registered broker-dealer by a third-party tokenizer. A public notice identified a potential investor-protection issue if that broker-dealer failed: it remains uncertain whether tokenized shares held in a self-custodied wallet would qualify as customer property or receive Securities Investor Protection Corporation coverage.
This article has been refined and enhanced by ChatGPT.
