Challenges for Blockchain-Based U.S. Stock Trading Venture

A recent joint venture seeking to facilitate the trading of U.S. stocks on the blockchain is currently facing significant challenges. Co-chaired by former New York Governor Andrew Cuomo, the initiative involves the cryptocurrency firm OKX and the parent company of the New York Stock Exchange (NYSE). Announced just a month ago, the plan aimed to provide 24/7 trading for tokenized shares of 62 companies. However, as of Thursday, 54 of these companies have raised objections to the proposal.

Rising Concerns from Major Corporations

Among the latest companies to express concerns are Boeing and ServiceNow, joining industry giants such as Apple, Home Depot, and GE Vernova, which filed objections just a day prior. The list of objectors also includes major players in corporate America like Microsoft, Alphabet, Nvidia, JPMorgan Chase, and Walmart, signaling widespread hesitation among prominent firms.

Objection Landscape

In addition to the original proposed lineup of 62 companies, several others including Wells Fargo, Nebius Group, Arm Holdings, Cerebras Systems, and Cigna Group have filed their objections as well. Home Depot has chosen not to comment on the matter, while other companies such as Boeing and Apple did not immediately respond to inquiries from Fortune.

Launch Prospects and Regulatory Background

The concerns arise shortly after Cuomo’s announcement regarding the tokenized trading platform, which was made possible under a temporary exemption granted by the Securities and Exchange Commission (SEC). This exemption, established in September, allows select platforms to offer trading for tokenized stocks without the need to register as national securities exchanges—provided they adhere to specific conditions.

Current Status of the Proposed Lineup

Among those companies not objecting to OKXICE’s proposed trading venue, several are primarily associated with the cryptocurrency or blockchain sectors. The list includes:

• Circle Internet Group
• Coinbase
• Robinhood
• BitGo
• Strategy
• Securitize
• Palantir
• Super Micro Computer

Impact of Objections

A spokesperson for Applied Optoelectronics, one of the companies that objected, expressed concerns regarding the potential effects on stock pricing, liquidity, and volatility. “We don’t see a clear benefit to AOI or our shareholders that justifies these uncertainties,” the spokesperson stated, highlighting fears that investors may mistakenly assume the company endorses this offering.

Legal Framework Considerations

The SEC’s approval of this exemption occurred shortly after the Clarity Act, designed to establish a regulatory framework for digital assets, stalled in the Senate. As per the exemption, platforms like OKXICE are not required to obtain direct permission from companies to offer tokenized share trading; however, they must notify these companies and allow a 30-day period for objections.

Outlook and Next Steps

Despite the mounting objections, OKXICE has not disclosed whether these issues will affect the anticipated launch of the trading platform. As the situation evolves, the venture’s future depends heavily on addressing the concerns raised by these significant industry players.

This article was originally featured on Fortune.com.