Executives from Intercontinental Exchange (ICE), OKX, and Securitize have expressed concerns that synthetic stock tokens pose risks to both markets and retail investors, as ICE advances with a regulated platform for tokenized U.S. equities.
Michael Blaugrund of ICE, which owns the New York Stock Exchange (NYSE), discussed during a panel at Consensus Miami that NYSE’s initial offering will involve pre-funded tokenized equity trading against stablecoins. He described this method as ‘not the sexiest way’ to develop a market but emphasized its importance in providing issuers, investors, and regulators with a structure for evaluation before introducing more complex features like leverage or self-custody.
Carlos Domingo, CEO of Securitize, highlighted that some offshore tokenized stock products use public-company names without issuer consent and do not represent the actual equity. He noted that certain stocks have up to five different tokenized versions, such as Coinbase, none of which genuinely reflect equity ownership in those companies.
Domingo pointed out the risks during corporate actions, citing a case where one tokenized stock wrapper’s price varied by five times across markets following a stock split. Haider Rafique from OKX clarified that the exchange has not launched synthetic tokenized securities and does not intend to do so until regulated supply is established.
Rafique emphasized their focus on selling the underlying asset rather than promises, stating, ‘We’re not selling a promissory note.’ This caution follows increased scrutiny over stock tokens and private-market exposure. Last year, OpenAI indicated that Robinhood’s OpenAI stock tokens did not represent actual equity or have company approval. Robinhood later clarified these tokens were backed by a special purpose vehicle.
Domingo attributed the issue to regulatory arbitrage, where offshore issuers create wrappers in lenient jurisdictions without targeting U.S. or European markets, yet those tokens can still flow back into such regions.
The SEC has intensified its focus on distinguishing between genuine tokenized ownership and synthetic exposure, insisting that issuer approval is necessary for legitimate tokenized stock ownership.
Blaugrund likened the transition to tokenized securities with the shift from floor trading to electronic markets. ‘It’s now ‘when,’ not ‘if,’’ he stated.
In January, NYSE announced it was developing a platform for 24/7 trading and onchain settlement of tokenized U.S.-listed stocks and ETFs, pending regulatory approval. This platform aims to support fractional trading, immediate settlement, and dollar-denominated orders.
ICE later formed a strategic partnership with OKX, granting its customers access to ICE futures and NYSE tokenized equities, subject to necessary approvals. Additionally, NYSE engaged Securitize to assist in building the tokenized stock platform, with the firm acting as a digital transfer agent for issuer-backed tokenized securities.