Wells Fargo and Cisco Object to Tokenized Stock Plan

Wells Fargo (WFC), along with a public notice covering 6 new companies, objected to the trading of its shares on the tokenized stock platform planned under a partnership between New York Stock Exchange parent Intercontinental Exchange (ICE) and crypto exchange OKX. With the latest published notice, Cisco Systems (CSCO), Marvell Technology, Arm Holdings, Moderna, and Intuit also joined the objecting issuers. This brought the number of companies that do not want their shares tokenized and traded on the platform to 22.

While the number of companies objecting to the platform stood at 9 on October 15, it rose to 16 in the October 19 notice. In earlier notices, Microsoft, Alphabet, Goldman Sachs, Verizon, Broadcom, and UnitedHealth Group were among the companies opposing the platform. With Wells Fargo's inclusion, the number of major US banks on the list rose to 2 following Goldman Sachs. On the semiconductor and networking technologies side, Arm, Cisco, and Marvell were added alongside giants such as Microsoft, Broadcom, and Qualcomm.

Established as a 50-50 partnership between New York Stock Exchange parent Intercontinental Exchange and the US-based holding company of OKX, OKXICE TSV plans to allow approved investors to trade US stocks every day of the week without interruption. Transactions on the platform are structured to be executed via Uniswap v4 liquidity pools on OKX's XLayer blockchain network and paired with stablecoins such as USDC.

Which companies oppose the tokenized stock platform?

The initiative is expected to operate under the innovation exemption introduced in September by the US Securities and Exchange Commission (SEC) after the Clarity Act stalled in the US Senate. Although OKXICE TSV stated that issuer companies could tokenize their own shares and third parties could also issue tokenized shares, none of the 22 objecting companies took steps in this direction. The companies' grounds for objection and whether these objections will directly prevent the shares from trading on the platform were not disclosed in public announcements.

What risks stand out in the OKX and ICE partnership structure?

The operational risks carried by the platform were also shared in the latest published notice. Transactions are halted if the underlying stock is halted from trading on official exchanges, but apart from this, there is no circuit breaker mechanism on the platform. While there is no protection policy against maximal extractable value (MEV), a method of profiting by reordering transactions on the blockchain; warnings were issued that brokerages could face uncertainties regarding trade reporting and best execution rules, which could limit participation and constrain liquidity.

It was also reported that administrators can update smart contracts without prior notice and that the contract determining transaction authorization has only undergone internal audit. Meanwhile, Nasdaq, which received SEC approval for its own tokenized securities pilot project, had previously announced that it would keep its shares outside this exemption.

This content is for information purposes only and does not constitute investment advice.