Robinhood Markets Inc. (NASDAQ:HOOD) CEO Vlad Tenev posted a broad defense of tokenization on Friday, hours after AMC Entertainment Holdings Inc. (NYSE:AMC) CEO Adam Aron accused the company of issuing unregistered stock-tracking tokens in violation of U.S. securities law.
Tenev Makes His Case for Tokenization
Without directly naming Aron, Tenev said tokenization could bring the “best of US capital markets” to investors around the world. He argued that traditional market infrastructure, which relies on fixed trading hours, closed networks and multiple layers of intermediaries, was not built for 24/7 trading, self-custody or composability.
In his post on X, Tenev described the effort as “worth fighting for.”
“What gives me confidence is seeing how many different people are now pushing this industry forward. Founders are building new products, LPs are bringing liquidity, traders are finding new uses, and infrastructure teams are making the whole thing work,” said Tenev.
Tenev’s remarks echoed comments from last month, when he said tokenized stocks could eventually “carry the full rights of traditional shares” and urged U.S. regulators to “move quickly” to modernize the rules to enable tokenized stock trading, and that America does not fall behind in the efforts.
The Accusation That Started It All
The post followed Aron’s initial accusation that Robinhood was behind an effort covering more than 190 companies, including AMC, through Robinhood Assets (Jersey) Limited.
“I find this practice to be contemptible, outrageous, disgusting, detestable, inexcusable, vile. How can it possibly be legal? We have no connection to this at all, and do not condone it in any way,” said Aron. He added that the company is going to have its outside securities counsel look into this.
Aron also noted that Robinhood’s disclosures state that Stock Tokens are not registered under U.S. securities laws and may not be offered, sold, or delivered, directly or indirectly, in the U.S. or to U.S. persons. Offers and sales of Stock Tokens are subject to restrictions in other jurisdictions, including, without limitation, Canada, the United Kingdom, and Switzerland, according to the post.
Responding to Aron’s post, Tenev’s initial reply was brief: “What’s the concern?”
To Tenev’s question, Aron responded at length. “In good. conscience, how can Robinhood as a U.S. company set up an operation in far offshore Jersey, an island 3000 miles away, and market a security sort of posing as AMC in some shape or fashion, and not comply with U.S. securities laws. That is shocking and shameful,” said Aron.
Aron went on to say that this “quasi-fake market you are creating on the island of Jersey” sows distrust amongst the public about financial markets in general. “There already is distrust in financial institutions, you are potentially making it far worse,” He added.
Wall Street Weighs In on the Feud
The public feud between two prominent figures in American finance has drawn reaction from other market participants
Financial advisor Ross Gerber, backing Aron, also posted on Friday. He called the tokens “fake securities” comparable to a “Ponzi scheme” and warned it has the potential to cause a financial crisis. “This must be stopped, unfortunately the current regulators seem fine with Robinhood being a gambling app but yet is SEC registered,” said Gerber.
Other industry executives have echoed similar concerns.
Archax CEO Graham Rodford said “a tokenized stock should mean the stock, tokenized,” while Securitize CEO Carlos Domingo flagged an example of what happens when these distinctions get ignored, pointing to one AMC-linked trading pair on Robinhood Chain that printed at roughly 60 times AMC’s actual share price due to thin liquidity and limited arbitrage.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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