Wall Street can stop a tokenized share, but can it stop a stock perp?

Costco recently joined 67 other companies in objecting to third-party tokenized versions of their stock on OKXICE's proposed blockchain platform. The supermarket giant's objection highlights a fundamental distinction in how financial markets treat ownership versus price exposure. Despite blocking tokenized shares, Costco's stock continues to be traded through perpetual contracts that offer price exposure without granting ownership rights.

The SEC's September exemption allows qualifying venues to operate outside ordinary exchange registration, provided tokens preserve equivalent shareholder rights including votes, dividends, and claims on residual assets. Companies have 30 days to object after receiving notice, and Costco and others have already exercised this right regarding OKX ICE.

Perpetual contracts offer different exposure

While tokenized shares represent actual ownership, perpetual contracts function differently. Kalshi lists a Costco perpetual that allows traders to gain when the stock rises or falls without ever owning shares. These contracts have no scheduled expiry and offer substantial leverage—Costco's market showed maximum leverage of 4.9 times on November 6, meaning $1,000 of collateral supports $4,900 of price exposure.

Regulatory battle intensifies

The Capital Markets Alliance Association, including declarations from Cboe and Citadel Securities, is challenging the approvals. They argue that contracts without future delivery cannot qualify as security futures. Cboe contends these contracts fall under security-based swaps and warned that stock-perp trades would escape the securities markets' consolidated surveillance system.

Judge Valerie Caproni's November 3 order found challengers likely to succeed in arguing the CFTC exceeded its authority, but denied an emergency restraining order. The approvals remained undisturbed, with the government's opposition to a preliminary injunction due November 6 and the alliance's reply due November 10.

Wall Street embraces both approaches

Interestingly, the NYSE's parent company ICE is pursuing both markets. On October 29, ICE announced an investment and agreement with Trade[XYZ] to bring its Hyperliquid-based perpetual markets into the US, while simultaneously backing the tokenized shares platform through its OKX joint venture.

The dispute partly concerns which institutions can offer crypto's trading model and which rules they must follow. For investors, the difference lies in what each product promises—tokenized shares preserve shareholder rights with platform costs, while perpetuals offer leveraged exposure governed by collateral requirements and funding payments.

As the legal challenges unfold, companies like Costco can block tokenized shares on specific venues, but cannot prevent perpetual contracts from trading. The ticker may be familiar, but the rights and risks come from the contract structure itself.