Objections from 22 companies, including Microsoft and Alphabet, Google’s parent company, to the tokenized stock platform from OKX and ICE have raised questions about shareholder rights and concerns over the 30-day decision window.
According to CoinDesk’s analysis, the issue for the companies is less about their shares being traded on a blockchain than about how those transactions are handled. Among those opposing the platform developed by OKX and Intercontinental Exchange (ICE), owner of the New York Stock Exchange, are McDonald’s, Goldman Sachs, Wells Fargo, and Cisco.
Microsoft and Alphabet’s objections had been disclosed earlier. The new assessment focuses on the decision-making behind the growing list.
What does it cost companies to stay silent?
Under the SEC framework described in the report, the platform notifies a company before making its shares available for trading. If the company does not object within 30 days, trading can begin.
According to an assessment by law firm Latham & Watkins, the rules provide no mechanism for objecting after that period has passed or for reversing an earlier decision not to object once trading has begun. As a result, questions that companies cannot resolve quickly may make objecting from the outset more attractive.
Dave Hendricks, CEO of tokenization company Vertalo, says some companies learn through a notification that third parties are tokenizing their shares. That raises questions such as who holds the shares underlying the token, how dividends will be distributed, and how voting rights will be exercised. According to Hendricks, if these issues cannot be clarified within 30 days, objecting is a reasonable choice.
Nasdaq also wants a different model for the technology it supports
Olivia Vande Woude, tokenization lead at Ava Labs, says OKX-ICE has drawn the first objections because it was the first platform to submit a notification under the SEC’s innovation exemption. In a system where objecting comes at no cost and silence means approval, she expects the list to grow.
Nasdaq’s approach also brings the debate over the model to the fore. The exchange operator, which supports tokenization, plans to object to its own shares being traded on these platforms under the current exemption. Nasdaq argues that transactions outside the existing national market system could fragment liquidity, weaken price formation, and fail to provide certain investor protections. Its own model aims to keep tokenized shares within the existing exchange system.
Will demand from new investors offset the risks?
According to Reid Noch of TD Securities, the expected benefits for companies are also not yet easy to measure. New investor demand could come from abroad, but it is unclear whether that would offset the risks of around-the-clock trading with low liquidity outside the familiar market structure.
By contrast, Securitize and BitGo said they would not object to their shares being listed on the OKX-ICE platform. Securitize CEO Carlos Domingo said the company is conducting outreach to help companies understand different trading models and shareholder rights.
Not investment advice.