Crypto exchanges claimed they would provide access to SpaceX IPO via tokenized stock, but nothing materialized.

      TL;DR: Binance, Bybit, and Bitget have canceled their tokenized SpaceX IPO campaigns after xStocks failed to deliver the shares, leaving over $1 billion in orders unfulfilled. Crypto investors hoping to access the much-anticipated IPO through tokenized SpaceX stock found out on Friday that the shares would not be delivered. All three exchanges aborted their tokenized offerings after xStocks, the provider behind them, could not furnish the underlying assets. Reports indicate that xStocks and its partners had accrued more than $1 billion in customer orders related to SpaceX prior to the failure.

      Bybit initiated the earliest campaign on June 7, presenting SpaceX as the first offering on its IPO Express product and informing users they could “participate in the SpaceX IPO subscription using crypto and gain early access before spot trading begins.” Following this, Binance Wallet launched its SPCXx campaign on Thursday, labeling it a “non-guaranteed subscription process” via xStocks. Bitget Wallet informed users on June 9 that they could “access tokenized stock exposure to SpaceX” through xStocks as well.

      When SpaceX went public on Friday, none of the crypto allocations came through. Bybit informed users that “due to xStocks’ inability to deliver the underlying assets,” it had no allocation, resulting in no issued subscribed SpaceX shares. The exchange offered automatic refunds and a reward calculated at 10 percent APR over a fixed four-day period. Binance canceled its campaign the same day, refunding all locked USDC and promised to distribute $1 million worth of its bStocks SpaceX tokens among participants by June 18.

      The extent of the failed allocation was considerable. As per The Defiant, Binance’s SPCXx campaign attracted $557 million in on-chain subscriptions across almost 27,700 addresses before being unwound with no distributions. Bitget Wallet also announced full refunds for affected users. Community feedback suggested that Kraken customers experienced slightly better outcomes, with some receiving about four shares' worth of tokenized SpaceX exposure—less than they requested, but still something.

      This allocation issue wasn't exclusive to crypto. SpaceX’s $75 billion IPO was over four times oversubscribed, with around $250 billion in total demand. Conventional brokerage customers also received fewer shares than requested, although firms like Fidelity, Charles Schwab, and SoFi completed at least partial allocations for eligible clients. In contrast, crypto customers received nothing at all.

      The failure highlighted a fundamental issue with these products' structure. Crypto exchanges lacked direct connections with SpaceX’s underwriters or the IPO allocation process, relying instead on xStocks as an intermediary to secure and deliver the underlying shares. When that intermediary couldn’t secure shares due to the heavy oversubscription, the entire tokenized product collapsed, despite the demand gathered by the exchanges.

      Even insiders in the crypto industry found the situation concerning. Tom Farley, CEO of the crypto exchange Bullish, expressed on X that “perhaps tokens should actually be approved by the issuer and should represent the actual underlying share.” Earlier on Friday, ARK Invest’s Lorenzo Valente pointed out seeing "40 exchanges and wallets advertising SpaceX stock” and questioned, “What exactly am I buying?”

      Not all tokenized SpaceX products failed. The xStocks SPCXx token did eventually launch post-IPO, and CoinGecko reported tokenized SpaceX products had a combined market cap of nearly $50 million on their first trading day. However, this amount is hardly significant compared to SpaceX’s estimated public valuation of around $2.1 trillion. Additionally, PreStocks’ Solana-based SpaceX token was trading at a considerable discount compared to actual public shares, a discrepancy acknowledged by the issuer due to a six-month lockup on the underlying shares.

      This incident surfaced as the SEC had already postponed a plan, reported by Bloomberg in May, to permit crypto firms to trade tokenized versions of U.S. stocks. While tokenized equities are being promoted alongside stablecoins as signs of crypto's mainstream acceptance, the SpaceX incident revealed that much of that acceptance still hinges on centralized issuers, custodians, and allocation pipelines. The original intent behind Bitcoin was to lessen dependency on trusted financial intermediaries, and Friday's events served as a reminder that tokenized stocks, by their very nature, remain reliant on them.