Whalesbook
Regulatory Concerns Grow Over Tokenized Equities
Executives from Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), are warning about the rise of synthetic tokenized stocks. Leaders from ICE, OKX, and Securitize have cautioned that these products, particularly those offered offshore, carry significant risks of confusing retail traders.
Carlos Domingo, founder and CEO of Securitize, pointed out that many unauthorized tokenized products mimic public company stocks but do not represent actual equity. He described a market where multiple versions of a single stock token can exist, none truly linked to the actual asset. Domingo noted one tokenized stock traded at five times the price of others after a stock split, highlighting the confusion during corporate actions.
NYSE's Regulated Path to Tokenization
In contrast, Michael Blaugrund, involved in strategic initiatives at ICE, detailed NYSE's careful approach. The exchange intends to launch its first version of tokenized U.S. equities trading against stablecoins. Blaugrund acknowledged this might not be the most "exciting" method, but he stressed its clear regulatory framework. This approach allows evaluation by issuers, investors, and regulators before potentially adding more complex features like leverage.
Haider Rafique, OKX's global managing partner, stated that OKX has not launched synthetic tokenized securities and will not do so until a regulated supply chain is in place. He differentiated their model from selling "promissory notes" to offering actual underlying assets. This stance aligns with increasing regulatory focus, including the SEC's sharper attention on the difference between genuine token ownership and synthetic exposure, which requires issuer approval for real tokenized stock.
The Shift Toward Digital Ownership
Blaugrund compared the development of tokenized securities to the move from floor trading to electronic markets, predicting widespread adoption is inevitable. NYSE previously announced plans to explore tokenized U.S.-listed stocks and ETFs, pending regulatory approval, aiming to enable features like fractional trading and immediate settlement. Securitize has been chosen to help build this tokenized stock platform, serving as a digital transfer agent for issuer-backed securities.