SpaceX IPO Debut: RWA Renaming Battle
SpaceX's IPO debut faced some hiccups, as many crypto users and enthusiasts were not able to secure SpaceX IPO shares and ended up receiving refunds instead.
Various cryptocurrency launchpad platforms, including Binance, had the opportunity to offer tokenized shares of SpaceX's highly anticipated IPO. However, almost all platforms failed to receive the allocated shares due to issues with their supplier, xStocks.
xStocks intended to tokenize SpaceX IPO shares as SPCXx. They received demand from customers exceeding $1 billion, indicating the significant interest from these trading platforms. However, when it came time for distribution, the upstream supply of underlying shares fell short, leading to the cancellation of many downstream activities. The platforms had no choice but to issue refunds and provide some form of compensation.
Given Bitcoin's current status as a key tech asset and the crypto industry's position in the "perceived hierarchy" in the secondary market, this incident could easily be misinterpreted as "Wall Street looking down on the crypto industry" and making abrupt decisions to cancel allocations.
However, this interpretation may not be entirely accurate.
The true breakdown occurred not in the blockchain-related minting process but in the IPO distribution process.
As SpaceX's IPO garnered global attention, the primary underwriters were Goldman Sachs and Morgan Stanley, with Bank of America, Citigroup, and JPMorgan also among the top underwriters. A top-tier, prestigious team.
Another implication of this prestigious lineup is the immense influence they wield.
The IPO allocation process has always been one of Wall Street's most rigid power channels. The allocation, reduction, and symbolic amounts received are not inherently "technologically neutral." There have been numerous precedents of last-minute changes.
Recently, during Circle's listing, a similar situation unfolded on Robinhood. Due to overwhelming demand, users who applied for Circle's IPO on Robinhood ended up with no shares at all. Robinhood is a top platform for U.S. retail investors.
Reddit's IPO filing also mentioned that shares were allocated to moderators, but in the end, the moderators did not receive any shares. This was because of oversubscription by a factor of 5x, and their portion was reassigned to others.
Similar incidents have occurred in other capital markets. According to Economic Times, several foreign and Indian institutions pulled out of anchor allotment for India's Meesho last year because they felt that SBI Mutual Fund had received an excessively high share of pre-IPO shares, leading to conflicts among institutions.
Now let's take a look at the core underwriters, Goldman Sachs and Morgan Stanley.
In 2005, the U.S. Securities and Exchange Commission (SEC) sued Morgan Stanley and Goldman Sachs, alleging improper allocation practices during IPOs in 1999 and 2000. The SEC claimed that both companies attempted to induce institutional clients who received IPO allocations to continue buying the stock after the listing. Neither company admitted nor denied the allegations, but each agreed to pay a $40 million civil penalty.
Evidently, this was not the first time they had temporarily adjusted allocation shares.
In an IPO, it's not a matter of "first come, first served" for allocation. The underwriters first receive indications of interest, then assess the order book, and finally, in conjunction with the issuer, decide how much each party will receive. There are various soft commitments, channel indications, and subscription intentions in between. What may appear as "IPO allocation" on the front end trading platform is merely a "maybe get some" on the investment bank's back end.
Therefore, attributing the failure of this SPCXx IPO subscription to xStocks' lack of capability or to the underwriters' disdain for the crypto space is not accurate enough.
xStocks indeed had issues with front-end expectation management. Users saw "SpaceX IPO access" and felt like "I participated in the IPO." However, if xStocks upstream only had subscription intentions, channel indications, or non-final allotments, it lacked the ability to magically create SpaceX stocks. Tokenization can only move assets onto the blockchain; it cannot snatch IPO allocation rights from Goldman Sachs and Morgan Stanley.
Crypto KOL @cryptobraveHQ has mentioned the team behind xStocks. The core team consisting of Adam Levi, Roberto Klein, and Yehonatan Goldman had previously worked on the DAOStack project, which ultimately failed and later transitioned to Backed and now xStocks. The official website indicates that Backed, in collaboration with Kraken, Bybit, and Solana, launched xStocks in 2025, achieving a product scale of $150 million in assets under management (AUM) and a total trading volume exceeding $10 billion.
However, this is most likely unrelated to the crypto space and resembles a very traditional narrative. A popular IPO, overwhelming demand, a tight underwriting book, and peripheral channels being crowded out. In the past, it was the regular brokerage users and company community users who were squeezed out. Now it's the turn of xStocks users and trading platform users.
Just another case of bad luck in the crypto world.
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