Robinhood CEO Rejects AMC’s Demand Over Stock Token Rights

TLDR

• Robinhood CEO Vlad Tenev says companies should not get veto power over third-party stock tokens.
• Robinhood calls its Stock Tokens debt securities backed one-for-one by real shares, not shares themselves.
• Token holders get price exposure but do not join a company’s shareholder register or get voting rights.
• AMC CEO Adam Aron says Robinhood never got permission and is considering legal and regulatory action.
• No court or the SEC has yet ruled on whether Robinhood needed AMC’s approval.

Robinhood CEO Vlad Tenev is defending his company’s stock token product after AMC Entertainment pushed back hard. Tenev says the fight comes down to legal structure, not technology.

He laid out his position in a post on September 11. Tenev argued that a company should control the rights tied to its shares. He said it should not control every lawful use of those shares once investors already hold them.

The dispute started after AMC CEO Adam Aron objected to a Robinhood token linked to AMC shares. Aron said AMC never authorized or endorsed the product.

What Robinhood’s Stock Tokens Actually Are

Robinhood’s tokens are not AMC shares placed on a blockchain. The company says they are debt securities issued by Robinhood Assets, a Jersey-based entity.

Each token tracks the price of an underlying stock. Robinhood says every token is backed one-for-one by real shares held with a U.S. custody partner.

Token holders do not appear on AMC’s shareholder register. They get no voting rights and cannot claim the legal rights tied to direct stock ownership.

Robinhood says its tokens can pass along dividend value through adjustments built into the product terms. Corporate actions still depend on Robinhood’s own contract terms, not on AMC’s actual policies.

Tenev broke tokenized stocks into three types. A company can tokenize its own shares directly. A third party can tokenize shares it holds in custody. Or an independent firm can issue a separate security that simply tracks another company’s stock.

He said issuer approval should only be required in the first two cases. He argued the third model, which Robinhood uses, does not need a company’s sign-off because it changes nothing about the underlying stock.

AMC Says It Never Gave Permission

Aron said on September 4 that AMC has no relationship with Robinhood’s token. He said the structure could confuse investors about what rights they actually hold.

He also raised concerns about AMC’s ability to raise capital through its official securities. Aron demanded that Robinhood stop offering the token tied to AMC stock.

Robinhood’s chief legal officer, Dan Gallagher, rejected that demand in public comments. Tenev then defended the token model again during a CNBC interview on September 9.

The Securities and Exchange Commission has not ruled on this dispute. In January, three SEC divisions published a joint statement describing different categories of tokenized securities, including third-party products like Robinhood’s.

That statement said the legal classification of a token depends on the rights and obligations it creates. It did not decide whether third-party tokens require the referenced company’s consent.

A separate SEC proposal released in September would update transfer-agent rules. It would allow blockchain systems to support official securities records, but it would not automatically turn a token into a real share.

Robinhood launched its current Stock Tokens outside the United States in July through Robinhood Chain. The products remain unavailable to U.S. investors and several other jurisdictions, including Canada and the United Kingdom.

As of September 14, AMC has not filed a lawsuit against Robinhood. The SEC has not announced any investigation or public response to Aron’s threatened regulatory referral.

The post Robinhood CEO Rejects AMC’s Demand Over Stock Token Rights appeared first on Blockonomi.