Executives at Intercontinental Exchange (ICE), OKX and Securitize have warned that synthetic tokenized stocks are creating market and retail risks, as ICE moves forward with a regulated platform for tokenized US stocks.
Michael Blaugrund, who works on strategic initiatives at ICE, the owner of the New York Stock Exchange (NYSE), said during a panel at Consensus Miami that the first version of the NYSE will begin trading pre-funded tokenized stocks against stablecoins.
That model is “not the most attractive way” to build a market, Blaugrund said, but it gives issuers, investors and regulators a structure they can evaluate before more complex features like leverage or self-custody.
Carlos Domingo, founder and CEO of Securitize, said offshore tokenized equity products are taking the opposite approach. Some use public company names without the issuer’s approval and do not represent the underlying equity, he said.
“For some stocks there are like five different tokenized versions,” Domingo said, citing Coinbase as an example. “None of them actually represent equity in Coinbase.”
The risk is clearest during corporate actions, Domingo said, as he saw a tokenized stock wrapper trade at prices that differed five times between markets after a stock split.
Haider Rafique, global managing partner at OKX, noted that the exchange has not launched synthetic tokenized securities and does not plan to move before regulated supply is established.
“We are not selling a promissory note,” Rafique said. “We are actually selling the underlying asset.”
The warning follows broader scrutiny of equity tokens and private market exposure. OpenAI said last year that Robinhood’s OpenAI stock tokens did not represent OpenAI equity and were not approved by the company, while Robinhood later said the tokens were backed by a special purpose vehicle.
Domingo said the issue is regulatory arbitrage. Offshore issuers can create wrappers in permissive jurisdictions and claim they are not aimed at the United States or Europe, he said. Permissionless tokens can still return to those markets.
The SEC has also focused its attention on the distinction between true tokenized ownership and synthetic exposure, saying that issuer approval is required for true ownership of tokenized shares.
Blaugrund compared the shift to tokenized securities to the move from floor trading to electronic markets.
“Now it’s about ‘when,’ not ‘if,’” Blaugrund said.
The NYSE said in January that it was developing a platform for 24/7 on-chain trading and settlement of U.S.-listed tokenized stocks and ETFs, pending regulatory approval. The platform is expected to support fractional trading, immediate settlement, and dollar-denominated orders.
ICE subsequently established a strategic partnership with OKX, giving the crypto exchange’s clients access to ICE futures and tokenized NYSE stocks, also subject to approvals.
NYSE also tapped Securitize to help build the tokenized equity platform, with the company acting as a digital transfer agent for issuer-backed tokenized securities.
