Bullish Targets Wall Street’s Tokenized Stock Ownership Gap

Wall Street’s Tokenization Pivot: From Price Mirrors to Legal Ownership

A consortium of financial infrastructure heavyweights—Bullish, Equiniti, Alpaca, Apex Fintech Solutions, and Drivewealth—launched the Issuer Sponsored Token Coalition on September 24 with a singular objective: to replace the crypto wrappers that merely track stock prices with onchain tokens that represent actual, legally recognized share ownership. The distinction is not semantic. As Drivewealth CEO Naureen Hassan put it plainly: “Much of what’s marketed today as ‘tokenized equity’ isn’t equity at all. Investors think they own the share, and they don’t.”

Current tokenized-stock models typically operate by having a broker hold real shares in custody and mint tokens against them on a 1:1 basis. While these tokens can deliver economic exposure and, in some configurations, pass along dividends, the token holder often does not appear on the company’s official shareholder register. That absence leaves voting rights, proxy participation, and corporate actions such as stock splits in a legal gray zone. Issuer-sponsored tokenization takes a fundamentally different approach: the public company and its transfer agent are directly involved, anchoring the token to the canonical ownership record so that the full bundle of shareholder rights travels with the digital asset.

Regulatory Catalyst and the Infrastructure Bridge

The coalition’s formation coincides with a pivotal regulatory development. On September 17, the U.S. Securities and Exchange Commission opened a five-year Innovation Exemption permitting certain Tokenized Securities Venues to operate permissioned automated market makers and liquidity pools for tokenized National Market System stocks. The exemption carries a critical condition: qualifying tokens must provide the same rights and privileges as traditional shares. Tokens that merely mirror a stock’s price do not qualify, effectively setting a regulatory floor that the coalition is structured to meet.

The membership roster reads like a map of Wall Street’s plumbing. Equiniti, which the crypto exchange Bullish agreed to acquire in May, serves nearly 3,000 issuer clients and more than 20 million shareholders. As a transfer agent, Equiniti maintains the official shareholder books, making it the essential bridge between an issuer’s records and whatever eventually lives onchain. On the brokerage side, Alpaca reported through mid-2026 that it accounted for roughly 94% of tokenized U.S. stocks and ETFs, backed by more than $1.5 billion in underlying shares held in custody. Apex Fintech Solutions contributes clearing and broker-dealer infrastructure, while Drivewealth supplies U.S. stock access to investing platforms worldwide.

Technical Standards and the Path to Launch

The group’s immediate agenda targets the hard problems of interoperability: technical standards, settlement workflows, custody models, and the integration of traditional market infrastructure with blockchain rails. Members will meet with public-company issuers at the New York Stock Exchange on October 27 to advance those discussions. Notably, no new tokenized stock launched alongside the coalition’s announcement—a deliberate signal that the industry is prioritizing legal and operational certainty over speed to market. Before Wall Street can put real shares onchain, it first has to ensure that a token claiming to represent ownership actually does.

Why This Matters

The Issuer Sponsored Token Coalition represents the most concerted effort yet to align blockchain-based capital markets with existing securities law and market structure. By anchoring tokens to the official shareholder register—maintained by transfer agents like Equiniti—the model seeks to eliminate the legal ambiguity that has plagued earlier tokenization attempts. The SEC’s Innovation Exemption provides a regulatory sandbox, but its requirement for full rights parity raises the bar: only tokens that convey voting, dividends, and corporate-action participation will qualify. If the coalition succeeds in standardizing settlement, custody, and interoperability across its members’ combined infrastructure, it could establish the blueprint for a new class of permissioned, institutionally native digital securities. The October 27 meeting at the NYSE will be an early test of issuer appetite and the practical feasibility of migrating shareholder records onto distributed ledgers without disrupting the existing equity ecosystem.

Frequently Asked Questions

What is the difference between current tokenized stocks and issuer-sponsored tokenization?

Current models typically involve a broker holding shares in custody and minting tokens that track the stock’s price and may pass dividends, but the token holder is not listed on the company’s official shareholder register. Issuer-sponsored tokenization ties the token directly to that register—maintained by the transfer agent—so voting rights, proxies, stock splits, and other corporate actions travel with the token.

Which firms formed the Issuer Sponsored Token Coalition and what do they bring?

The coalition comprises Bullish, Equiniti, Alpaca, Apex Fintech Solutions, and Drivewealth. Equiniti (being acquired by Bullish) serves nearly 3,000 issuers and 20+ million shareholders as a transfer agent. Alpaca backs roughly 94% of tokenized U.S. stocks with over $1.5 billion in custody. Apex provides clearing and broker-dealer infrastructure, and Drivewealth powers U.S. stock access for global platforms.

What does the SEC’s Innovation Exemption require for tokenized securities?

The five-year exemption, effective September 17, allows qualified Tokenized Securities Venues to operate permissioned automated market makers and liquidity pools for tokenized National Market System stocks. The key condition: tokens must provide the same rights and privileges as traditional shares—including voting, dividends, and corporate actions. Price-tracking tokens that do not confer legal ownership do not qualify.