A growing list of companies rejecting tokenized trading of their shares is an expected part of testing a new market structure, Andrew Cuomo, co-chairman of the OKX-ICE joint venture, said after Microsoft, Alphabet and Goldman Sachs joined the objectors.
“This is a very natural response,” Cuomo, an OKX board member and former New York governor, said during a press call on Tuesday. “The model was designed to give companies the right to determine whether they want to opt in or opt out.”
“We always anticipated that, because this is such a dramatic and revolutionary change, many companies would want to wait and see how it goes rather than be the first to participate,” he added.
His remarks followed a Monday public notice showing 16 companies had objected to having tokenized versions of their shares traded on OKXICE, the planned venue from crypto exchange OKX and New York Stock Exchange parent Intercontinental Exchange (ICE).
Seven newly disclosed objectors — Microsoft, Alphabet, Goldman Sachs, Qualcomm, Caterpillar, McDonald’s and Western Digital — joined companies including Broadcom, Verizon and UnitedHealth.
The objections offer an early look at how companies are navigating a new market structure that could let U.S. investors trade stocks around the clock on blockchain plumbing. The SEC’s five-year “Innovation Exemption,” rolled out roughly a month ago, gives qualifying venues room to test trading through automated market makers and liquidity pools, while giving issuers a say in whether their shares participate.
Cuomo described that approach as a deliberately limited experiment, with caps on the number of stocks and trading volumes.
“There are limits on how many companies can participate and on the volume that can be traded, so by definition, it really is a sandbox — a model demonstration,” he said.
Carlos Domingo, CEO of tokenization firm Securitize, also said issuers’ concerns warrant attention.
“We think it's entirely reasonable for issuers to ask questions about how these new markets work, particularly around pricing, investor protections and shareholder rights,” Domingo said.
“There's an important education process underway, and issuers should understand that they have different options for participating in tokenization, including issuer-sponsored approaches.”
Securitize earlier this month announced an offering of 12 tokenized stocks for U.S. investors, with plans to make them available on OKXICE’s venue. Microsoft and Alphabet are among those stocks. Their objections to OKXICE do not, by themselves, establish opposition to Securitize’s separate offering.
Dave Hendrick, CEO and founder of Vertalo, an SEC-registered digital transfer agent and tokenization software platform, said the objections show the framework is functioning as intended.
“The 30-day objection window is the mechanism the SEC built in to give companies a say,” he said. “Issuers are using it.”
Hendrick also pointed to gaps in infrastructure connecting traditional exchanges with tokenized securities venues.
“Today there is no system that normalizes, harmonizes and synchronizes trading on the exchanges with trading on TSVs, and that enforces the thoughtful framework the SEC designed in the Innovation Exemption,” he said. “Until that process exists, more objections are the predictable result.”
Still, companies could reconsider as that infrastructure develops.
“It's important to note that an objection today, before the rails are in place to harmonize, may be an acceptance later.”
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