Broadcom, Verizon and UnitedHealth are among nine companies keeping their stock off OKXICE's tokenized trading venue

Nine U.S.-listed companies, including Broadcom, Verizon, UnitedHealth Group and CoreWeave, have used a new SEC opt-out to keep tokenized versions of their shares off OKXICE, the trading venue owned by NYSE parent Intercontinental Exchange and an affiliate of crypto exchange OKX. The objections, listed in an Oct. 15 public notice, cover eight of the 63 stocks the venue said on Oct. 4 that it planned to offer.

One objection became nine

OKXICE's public notices show the objections arriving in stages. The first notice, dated Oct. 4, named 63 stocks the venue planned to offer in tokenized form, a list that runs from Nvidia, Tesla, Apple and Microsoft to JPMorgan Chase, Walmart and Boeing. It already recorded one objection, from Cerebras Systems, which was not among the 63. A revised notice dated Oct. 8 added AppLovin, Applied Digital and Rocket Lab. The Oct. 15 version adds five more: CoreWeave, Verizon, Applied Optoelectronics, Broadcom and UnitedHealth.

That puts eight of the 63 named stocks out of reach for OKXICE under the exemption. The notices do not say why any company objected, and they do not show the date each objection arrived, only the first notice in which it appeared.

How the opt-out works

The objections rest on an order the Securities and Exchange Commission issued on Sept. 17. It lets "tokenized securities venues" trade blockchain versions of U.S.-listed stocks without registering as exchanges, under a temporary exemption set to expire after five years. When a token is created by a third party rather than by the company itself, the venue must send the company written notice and wait at least 30 calendar days before trading it. If the company objects in writing by the 30th day, the venue cannot offer that token, and it has five business days to say so in its public notice.

Companies do not have to approve anything. If a company stays silent, the venue can go ahead. And an objection covers only the venue that sent the notice: according to Nasdaq's guidance for listed companies, the order provides no blanket opt-out from every venue that might want to trade a company's stock.

The SEC anticipated why companies might say no. In the order, it said issuers could worry about keeping their shareholder records straight as tokens move on a blockchain, or about "potential price dislocation or adverse effects on the price of the underlying NMS stock," because prices in these trading pools are likely to be set only by the ratio of assets in each pool.

What OKXICE is building

OKXICE is owned 50% by Intercontinental Exchange and 50% by OKC USA Holding, an OKX affiliate. Its notice describes a market that would run 24 hours a day, seven days a week, with no order book. Trades would go through automated pools on XLayer, a blockchain network, where each stock token is paired with a stablecoin: USDC, USDG or USDT. Traders would have to pass identity and sanctions checks and hold a non-transferable "soulbound" token that grants access.

The stock tokens would come from an outside firm, which would buy and hold one real share through a registered broker-dealer for each token it issues. Holders are supposed to get the same dividends and voting rights as ordinary shareholders. The notice gives no launch date. The SEC order requires a venue to post its notice at least 30 calendar days before it starts operating, and it caps how much each venue can trade: no more than 75 Tier 1 stocks under the market's limit up-limit down volatility plan, with volume in each token held to 0.25% of the underlying stock's average daily volume in the prior month.

Why companies are saying no

The notices give no reasons, but Applied Optoelectronics, a fiber-optic maker, has explained its decision. A spokeswoman told The Wall Street Journal the company was unsure how tokenization would affect its stock price, liquidity and volatility. She said investors might wrongly think the company was involved in an offering it did not sponsor or endorse, and that it saw no clear benefit "to AOI or our shareholders" that justified the uncertainty.

Nasdaq has gone further and said it intends to opt its own stock out of these venues. In guidance for listed companies last updated Sept. 29, it said venues under the exemption need not display their best prices, report them to the consolidated tape or publish trade data until 10 minutes after trades occur. "This effectively creates a shadow market for equity securities that can become disconnected from the broader market in both pricing and price transparency," it wrote. The exchange operator still says tokenization "holds real promise," but it intends for Nasdaq Inc. "to opt out of TSVs."

What it means for the lineup

For now OKXICE keeps most of its list. It told the Journal it still plans to launch trading in dozens of U.S. stocks, including Nvidia, Apple, Microsoft, Amazon, Alphabet, Tesla, JPMorgan Chase and Walmart. Andrew Cuomo, the former New York governor who co-chairs the venture, said he expects companies to be skeptical. Brett Redfearn, president of tokenization firm Securitize, whose tokens are expected to trade on OKXICE, said companies could object to one venue without rejecting tokenization altogether.

The bigger point is structural. Because consent is venue by venue, every venue that trades third-party tokens has to go through its own 30-day objection windows, and its menu of stocks will depend on which companies stay silent. The market these venues are chasing is still small: tokenized stocks were worth about $3.5 billion as of Oct. 15, up from about $680 million at the start of the year, according to data from The Block.