Vlad Tenev, CEO of Robinhood, stated that public companies should not automatically gain the right to block the tokenization of their shares if the corresponding product does not alter the rights and obligations of the issuer.
The conflict around Robinhood's tokenized shares intensified after Adam Aron, CEO of AMC Entertainment, criticized the platform over Stock Tokens linked to his company's shares and those of more than 190 other issuers. He claimed that such tokens are not registered under U.S. securities laws, and AMC has no involvement in their launch and does not endorse this practice.
Against this backdrop, the meme coin MEME, linked to tokenized AMC, appeared on the Robinhood Chain: its FDV increased by 206,400% in one day. It was after this criticism that Tenev explained Robinhood's position on whether issuers should have the right to block the creation of financial instruments linked to their shares.
According to Tenev, the question of issuer consent becomes particularly important as stock tokenization spreads. He noted that since the launch of Robinhood Stock Tokens just over two months ago, the company has seen significant demand for tools that give investors outside the U.S. on-chain access to American stocks and ETFs.
"Everyone should have access to quality financial assets regardless of where they live. At Robinhood, we are working to realize this vision on a global scale, starting with American stocks," wrote Tenev.
What Position Does Robinhood Take
Tenev linked the issue of issuer consent to three principles:
- investor rights: shares of public companies are property that can be freely transferred. In Tenev's opinion, owners of such assets should generally decide for themselves how to store and use them;
- issuer authority: a company controls the rights associated with the securities it has issued, but not all financial products that other market participants create based on them;
- technological neutrality: the need for issuer consent should depend on the rights and obligations created by the product, not on whether it uses blockchain.
Therefore, according to Robinhood's CEO, if a product alters the rights associated with the underlying shares, replaces the company's official shareholder registry, or creates new obligations for the issuer or its transfer agent, the company should be involved in the process.
At the same time, if a product is a separate financial instrument that owns freely transferable shares or references them without altering the rights, obligations, or official shareholder registry, Tenev believes issuer consent should not be mandatory.
"A company should control the rights associated with its shares—not every legitimate use of those shares after they are in the hands of investors. Moving on-chain should not give an issuer a veto power it never had off-chain. And issuers certainly should not block an entirely new group of investors simply because they don't yet understand the technology," stated Tenev.
Stock Tokens Use a Separate Financial Instrument
Robinhood's CEO explained that there are several ways to tokenize shares: the issuer can transfer its own shares on-chain, an intermediary can tokenize ownership rights to the underlying shares, or a third party can issue a separate instrument backed by or linked to such shares.
Robinhood chose the third model. Stock Tokens are separately issued instruments backed 1:1 by underlying shares. They provide economic exposure to the shares but do not alter the companies' capitalization, their rights, or the official shareholder registry.
According to Tenev, it is precisely this structure that should allow Robinhood to scale the product across different jurisdictions and work with thousands of stocks and ETFs without needing to involve each company in launching a separate tokenized product.
Lawyers have previously expressed a similar position in a conversation with Incrypted, commenting on the issue of issuer and investor rights in the context of stock tokenization. More details in the article:
The discussion is taking place against the backdrop of rapid expansion in the tokenized assets segment. In particular, the meme coin launch platform pump.fun introduced the Custom Pairs feature, which allows for creating tokens on the Solana network pegged to tokenized stocks, major cryptocurrencies, metals, and other assets.
