OKX-ICE venture plans 24/7 tokenized trading in 63 U.S. stocks

OKXICE, a joint venture between crypto exchange OKX and Intercontinental Exchange (ICE), the parent of the New York Stock Exchange, has told the U.S. Securities and Exchange Commission it plans to open a round-the-clock venue for trading tokenized versions of 63 U.S. stocks. The company posted a public notice dated Oct. 4, and former New York Governor Andrew Cuomo, the venture's co-chair according to CoinDesk, wrote on X on Oct. 5 that "OKXICE has notified the SEC that we intend to launch our Tokenized Securities Venue (TSV) under the SEC's new Innovation Exemption."

According to the notice, OKXICE LLC is a Texas limited liability company owned 50% by an ICE subsidiary and 50% by OKX's U.S. arm, OKC USA Holding. The venue will operate 24 hours a day, seven days a week.

A five-year exemption the SEC opened in September

The filing rests on the so-called Innovation Exemption the SEC issued on Sept. 17. The temporary order exempts qualifying tokenized securities venues from the definition of "exchange" under the Securities Exchange Act for five years, and it was published in the Federal Register on Sept. 22. According to the SEC's fact sheet, tokenized stocks on these venues are subject to limits on the number of symbols and volume traded, and holders must receive the same rights as holders of the traditional shares. Smart contracts must be auditable and public, and deployed on a public, permissionless blockchain.

Under the SEC order, a venue must post its notice on its website at least 30 calendar days before operating and give the SEC written notice within one business day of posting. To offer tokens created by a third party unaffiliated with a listed company, the venue must first notify that company and give it a chance to object. As of the notice date, the only objection had come from chipmaker Cerebras Systems (CBRS).

From Nvidia to Coinbase: 63 symbols

The list includes large caps such as Nvidia, Apple, Microsoft, Tesla and Amazon, along with crypto-linked companies including Strategy (MSTR), Coinbase (COIN), Circle (CRCL), Robinhood (HOOD), BitGo (BTGO) and Securitize (SECZ). Each stock will be paired with one of three dollar stablecoins: USDC, USDG or USDT.

The venue may list tokens created by the listed company itself or by an unaffiliated third party. When a third party creates them, that tokenizer holds the underlying shares one-for-one through an SEC-registered broker-dealer, and each token represents an entitlement to one share. Either way, holders must receive the same dividends, voting rights and share of residual assets on liquidation as holders of the traditional stock. OKXICE said trading in a token will stop whenever the underlying stock is halted on its primary listing exchange.

Uniswap pools instead of an order book

The venue works differently from a traditional stock exchange. It has no order book matching buy and sell orders; instead, prices are set by automated market makers (AMMs) in Uniswap v4 liquidity pools deployed on the public blockchain XLayer, based on the ratio of the two assets in each pool. The venue does not hold users' assets, and users trade directly from self-custodial wallets.

Access is restricted. Only wallets of users who pass identity verification (KYC) and anti-money-laundering and sanctions screening receive a non-transferable soulbound token (SBT), and only wallets holding that token can trade in the pools. Residents of, or people located in, comprehensively sanctioned jurisdictions cannot sign up. The notice states that the venue imposes no daily trade limits and no minimum or maximum trade size.

OKB, the native token of XLayer, traded around $127 on OKX at 3:40 p.m. KST on Oct. 5, up about 5% from 24 hours earlier. OKB is not listed on the Korean won markets of Upbit or Bithumb, two South Korean exchanges.