OKX and NYSE parent ICE seek to launch 24/7 tokenized US stock venue

OKX and New York Stock Exchange parent Intercontinental Exchange are preparing to launch a 24/7 venue for trading tokenized US stocks, according to a regulatory notice filed by their joint venture.

OKXICE, a 50-50 joint venture between ICE and OKX’s US parent, submitted a public notice dated October 4 detailing plans to operate a Tokenized Securities Venue under the Securities and Exchange Commission’s recently introduced innovation exemption.     

The venue plans to make tokenized shares of more than 60 companies available around the clock, including Nvidia, Apple, Microsoft, Amazon, Tesla, Coinbase, Robinhood, Circle, Strategy, JPMorgan and SpaceX. 

Trading will take place through permissioned Uniswap v4 automated market maker pools deployed on OKX’s XLayer blockchain. Each stock will trade against USDC, USDG or USDT rather than through a traditional order book.     

The system will remain permissioned despite running on a public blockchain. Investors must complete identity verification, anti-money laundering and sanctions screening before receiving a non-transferable soulbound token that authorizes their wallet to interact with the venue. That authorization is checked before trades, transfers and liquidity actions.

OKXICE will not custody customer assets or extend credit. Investors instead trade through self-custodial wallets, while transactions settle atomically on XLayer without a clearing agency, central counterparty or netting process.

Where a stock is tokenized by a third party rather than the issuer, a registered broker-dealer must hold the underlying shares one-for-one against the outstanding tokens. 

The tokens must provide holders with the same economic rights as the underlying stock, including dividends, voting rights and a claim on residual assets in a liquidation.

The structure was made possible by an SEC order issued September 17 that grants qualifying Tokenized Securities Venues a five-year conditional exemption from registration as an exchange. 

The regulator also provided conditional dealer exemptions for certain firms supplying liquidity to the AMM pools.

The exemption does not amount to the SEC individually approving OKXICE. The venue must comply with conditions covering shareholder rights, trading volumes, public smart contracts, issuer objections and trading halts, and the SEC can take enforcement action if it operates outside those conditions.  

Companies also retain the ability to prevent unaffiliated third parties from tokenizing their shares for trading on a TSV. Cerebras Systems has already submitted an issuer objection to OKXICE, according to the filing. 

The SEC’s exemption requires issuers to receive advance notice and an opportunity to object before third-party-tokenized shares begin trading.

The filing builds on a partnership between OKX and ICE announced earlier this year. ICE invested in OKX in March at a $25 billion valuation, with the companies outlining plans to connect OKX customers with ICE futures and NYSE tokenized equity markets. 

They subsequently created the 50-50 joint venture in June to develop regulated blockchain-based financial infrastructure.

The move also puts OKXICE into a broader race among established exchanges and crypto companies to extend US equity trading beyond traditional market hours. Reuters reported that the NYSE, Nasdaq and London Stock Exchange are all working on initiatives aimed at expanding round-the-clock trading.