Top executives from Intercontinental Exchange (ICE), OKX, and Securitize gathered at Consensus Miami to warn that synthetic tokenized stocks are creating real risks for both markets and retail traders. Their caution comes as ICE moves forward with a regulated platform for tokenized U.S. equities.
Michael Blaugrund, who works on strategic initiatives at ICE (the owner of the New York Stock Exchange), explained during a panel that NYSE’s first version will start with pre-funded tokenized equities trading against stablecoins. He admitted this model is “not the sexiest way” to build a market. But he argued it gives issuers, investors, and regulators a clear structure to evaluate before adding more complex features like leverage or self-custody.
Offshore Tokenized Stocks Raise Concerns
Carlos Domingo, founder and CEO of Securitize, pointed out that offshore tokenized stock products are taking the opposite approach. Some use public-company names without any issuer approval. They don’t represent the underlying equity at all, he said. Domingo noted that for some stocks, there are five different tokenized versions floating around. He cited Coinbase as an example, saying none of those tokens actually represent equity in Coinbase.
The risks become clearest during corporate actions like stock splits, Domingo added. He described seeing one tokenized stock wrapper trade at prices that differed by five times across different markets after a split. That kind of gap can easily mislead retail traders who might not understand what they’re buying.
Haider Rafique, OKX’s global managing partner, said the exchange has not launched synthetic tokenized securities and doesn’t plan to move before regulated supply is in place. “We’re not selling a promissory note,” Rafique said. “We’re actually selling the underlying asset.”
Regulatory Arbitrage and SEC Scrutiny
Domingo argued the core issue is regulatory arbitrage. Offshore issuers can create wrappers in permissive jurisdictions and claim they are not targeting the U.S. or Europe. But those permissionless tokens can still flow back into those markets anyway. The SEC has sharpened its focus on the distinction between true tokenized ownership and synthetic exposure. The agency has said issuer approval is required for genuine tokenized stock ownership.
This isn’t just a theoretical concern. Last year, OpenAI said that Robinhood’s OpenAI stock tokens did not represent OpenAI equity and were not approved by the company. Robinhood later said the tokens were backed by a special purpose vehicle.
What NYSE’s Platform Looks Like
Blaugrund compared the shift to tokenized securities with the move from floor trading to electronic markets. “It’s now ‘when,’ not ‘if,'” he said. NYSE announced in January it was developing a platform for 24/7 trading and onchain settlement of tokenized U.S.-listed stocks and ETFs, pending regulatory approval. The platform is expected to support fractional trading, immediate settlement, and dollar-denominated orders.
ICE later struck a strategic partnership with OKX, giving the crypto exchange’s customers access to ICE futures and NYSE tokenized equities, also subject to approvals. NYSE also tapped Securitize to help build the tokenized stock platform. Securitize will act as a digital transfer agent for issuer-backed tokenized securities.
The message from these executives seems clear: regulated tokenization is coming, but the unregulated synthetic versions popping up offshore are something retail traders should approach with caution.
