WSJ ad warns stock issuers on tokenized venue liability

A full-page Wall Street Journal advertisement warned stock issuers they could be liable if their shares trade on unregulated tokenized venues, Ledger Insights reported on Oct. 29. The advertisement attacks the SEC’s innovation exemption for tokenized securities venues and states that “Crypto will soon ‘tokenize’ your shares on unregulated venues.”

OKXICE is a joint venture of crypto exchange OKX and NYSE owner ICE, and objectors include Alphabet, IBM, J.P. Morgan, Goldman Sachs and Wells Fargo. The venue faced objections on 39 of the 63 tokens it intended to list as of Oct. 28, according to Ledger Insights. The ad pushes issuers toward issuer-sponsored tokens, or ISTs. Ledger Insights also reported that Nasdaq, which the ad’s QR code linked to, is promoting that model and has denied involvement.

Whether the issuer sponsored the listing or objected is the due-diligence question for any tokenized equity offering. An objection means the company whose shares would be tokenized is not party to the arrangement. An advisor comparing a tokenized share to the listed stock has to ask who stands behind the token and on what terms. The ad targets issuers to discourage tokenization outright or steer them to issuer-sponsored tokens, according to Ledger Insights.

As Private Wealth Daily previously reported, objections reached 26 by Oct. 27, when 23 of the 62 companies on OKXICE’s original roster had opted out, about 37%, according to a CoinDesk tally. Infrastructure providers have not uniformly stepped back. Securitize, which has a relationship with Computershare, published a rebuttal ad, Bullish is acquiring Equiniti, and most other major transfer agents have tokenization plans, according to Ledger Insights.