OKXICE Readies Tokenized Stock Platform as Issuers Push Back

OKXICE's launch plan meets a wall of objections

OKXICE, the stock token venue backed by cryptocurrency exchange operator OKX and NYSE parent Intercontinental Exchange Inc., is aiming to open on Nov. 23. The platform lists more than 70 tokens associated with stocks and exchange traded funds, though the full menu will not be available immediately. It also plans to include 59 ETFs from Direxion, a heavyweight in leveraged and inverse ETFs.

Ambitions to feature marquee names such as McDonald's Corp., Coca-Cola Co. and JPMorgan Chase & Co. ran into opposition after those companies objected to having their shares appear on the new venue. Among the 62 issuers OKXICE first targeted, 56 pushed back, leaving six for which no objections were disclosed, such as Coinbase Global Inc., Strategy Inc. and Robinhood Markets Inc. Each of those six has connections to crypto. In total, 67 companies have filed objections, including some that were not on the original list.

Andrew Cuomo, former New York governor and co-chair of OKXICE, cast the launch as part of a shift toward continuous trading that investors will follow. "The cat is out of the bag," he said. "The cat is consumer demand, and you can see companies shift toward, 'we better get ahead of this new technology and this new market structure.' "

The new rulebook and a market tilting to 24/7

OKXICE was among the earliest to seek SEC permission to operate a Tokenized Securities Venue, or TSV, after the agency in September allowed trading of tokenized shares in the US under an Innovation Exemption. The exemption requires third party venues to notify issuers and gives those issuers 30 days to object. If an objection arrives, the venue cannot tokenize that stock.

The result so far is clear. Ondo Finance's acting chief executive, Ian De Bode, whose firm offers wrappers tied to stock prices for investors outside the US, said, "A lot of these issuers are not focused on tokenized stocks." "The existing system works well for them."

Traditional exchanges are also stretching the clock. The NYSE and Nasdaq plan expanded trading hours next month. Crypto's always on rhythm has nudged Wall Street toward expecting nonstop access. The Managed Funds Association, meanwhile, asked the Trump administration in a Tuesday letter to move carefully in any move toward around the clock trading.

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Perps enter the chat, and the lawyers follow

Regulators are backing another frontier product. Last week, the Commodity Futures Trading Commission cleared perpetual futures tied to equities, placing them under joint supervision with the SEC. Perpetuals are leveraged contracts that do not expire, so they can trade when cash markets are closed.

Legal challenges arrived fast. The Capital Markets Alliance petitioned a New York federal court to stop trading in the products, saying the agency bypassed the Administrative Procedure Act; the coalition counts Cboe Global Markets Inc., Citadel Securities, various trading firms, and investor advocates among its members. Separately, CME Group Inc. sued the CFTC earlier this year, contending the products should be handled as swaps rather than futures.

Even so, activity is building. Prediction market Kalshi Inc. has started listing single-stock perpetuals for more than 50 companies, among them McDonald's, SpaceX and Meta Platforms Inc. Trading on Hyperliquid, a round the clock crypto venue launched in 2023, surged when a war involving Iran started in February while traditional oil markets were shut. Daily volume in some oil perps there climbed to billions of dollars.

Intercontinental Exchange partnered with Trade.xyz, one of the teams behind Hyperliquid, to design a US market for perps. The blueprint relies on Hyperliquid's infrastructure and would list Trade.xyz contracts tied to equities, equity indexes, commodities and currencies, subject to regulatory approval.

Issuers' stance and what it means for your portfolio

Most trading of tokenized stocks today happens on offshore platforms that US investors cannot legally access. Issuers often do not participate in those tokens, which may also omit shareholder features like dividends and voting rights. Nasdaq Inc. said it will not place its own stock on a TSV, noting, "Having carefully weighed the considerations, we have determined that our shares should not trade on a venue that does not display best prices in real time, report to the consolidated tape, or provide the transparency investors expect." At the same time, Nasdaq is committing $100 million to Payward, Kraken's parent, to build systems that enable trading of tokenized shares. It has outlined an approach that gives public companies more control over tokenized versions of their stock and is collaborating with Kraken on a gateway to move tokenized shares between regulated and on chain venues.

In plain English: the pipes are being built for tokens and perps, but issuers and courts are deciding how far and how fast. For your portfolio, that means new products may arrive in fits and starts. Expect selective availability at OKXICE's launch, continued testing of 24 hour access by exchanges, and early, legally contested experiments like single stock perps.

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