NYSE and Partners Raise Concerns Over Synthetic Tokenized Stocks

During a panel at Consensus Miami on May 6, 2026, executives from Intercontinental Exchange (ICE), OKX, and Securitize expressed concerns about the risks associated with synthetic tokenized stocks. Michael Blaugrund, involved in strategic initiatives at ICE, highlighted that while NYSE aims to build a regulated platform for tokenized U.S. equities, many offshore synthetic tokens do not accurately represent the underlying shares.

Blaugrund outlined that NYSE’s initial approach will involve trading pre-funded tokenized equities against stablecoins, as a means to ensure stability and regulatory compliance. He remarked that this method, while not exciting, offers a solid framework for evaluators—including issuers, investors, and regulators—before incorporating more advanced features like leverage or self-custody.

Carlos Domingo, CEO of Securitize, pointed out that some offshore synthetic tokens misuse public company names without the necessary authorization and may not represent the actual equity. He noted an alarming example where multiple tokenized versions of a single stock, such as Coinbase, exist without genuine equity backing. Domingo emphasized the risks that arise during corporate actions, highlighting a situation where the price of a tokenized stock differed dramatically across markets after a corporate split.

Haider Rafique of OKX confirmed that the exchange currently avoids selling synthetic tokenized securities, opting instead for a strategy that focuses on actual asset sales. He stated, "We’re not selling a promissory note. We’re actually selling the underlying asset." This cautious approach comes amid increasing scrutiny of stock tokens amid regulatory issues highlighted last year when a token linked to OpenAI’s shares was found not to represent the actual equity.

The issue of regulatory arbitrage is critical, as offshore issuers can create wrappers in lenient jurisdictions, claiming they do not target U.S. or European markets, while such tokens can still find their way back into those regions. The SEC is intensifying its examination of the distinction between genuine tokenized ownership and synthetic exposure, underscoring that true tokenized stock ownership requires issuer approval.

Blaugrund drew a parallel between the evolution of tokenized securities and the transition from floor trading to electronic markets, suggesting that tokenization's adoption is inevitable. Earlier this year, NYSE announced plans for a trading platform that would enable 24/7 trading and on-chain settlement of tokenized U.S.-listed stocks and ETFs, contingent upon regulatory approvals. This platform is anticipated to include fractional trading, immediate settlement, and transactions in U.S. dollars.

Furthermore, ICE has formed a strategic partnership with OKX, allowing customers of the crypto exchange to access ICE futures and NYSE tokenized equities, both subject to regulatory conditions. Securitize has also been enlisted by NYSE to assist in developing the tokenized stock platform, fulfilling the role of a digital transfer agent for securities that are backed by issuers.