- Robinhood CEO Vlad Tenev shot back at AMC CEO Adam Aron’s criticism of their Stock Tokens, citing property rights to defend their legality.
- He also guaranteed that Robinhood backs its tokenized stocks 1:1 with underlying assets.
Robinhood CEO Vlad Tenev defended his position on Robinhood’s Stock Tokens in an interview. It follows AMC CEO Adam Aron’s strong criticism of the trading platform’s unauthorized offering of the multi-billion-dollar entertainment company’s tokenized stocks.
Along the way, Tenev addressed concerns over the structure of Robinhood’s Stock Tokens. He assured investors that their tokenized stocks, including the controversial AMC Stock Tokens, are backed 100% by their underlying shares.
How the Latest AMC-Robinhood Beef Started
Aron has recently called out Tenev for offering tokenized versions of AMC’s stocks on Robinhood. The boss of the American movie theater chain argued that such practice circumvents US securities laws, undermines the traditional relationship between companies and their shareholders, and dilutes the institution’s capital-raising controls. He also claimed it decouples shareholders from the benefits guaranteed by regulated markets.
Additionally, Aron expressed concern over unauthorized tokenized stocks’ potential to cause further erosion of public trust in financial institutions. With that, he urged Tenev’s company to “voluntarily cease” trading AMC Stock Tokens, and threatened legal action if it continued to ignore his demands.
Tension apparently flared in the conversation when Tenev responded to Aron’s lengthy rant with a nonchalant, meme-worthy comment asking, “What’s the concern?”
Sentiment in stock and crypto investing communities was divided over the matter as supporters from both sides chimed into the debate. Nonetheless, Tenev stood his ground, stating that companies have no control over financial products built on their shares once they go public.
“Issuers should have control and do have control over the rights and obligations of the stock that they issue, but that doesn’t mean they control everything about it,” Tenev explained in a CNBC interview. “In particular, they don’t control other companies issuing their own securities that reference those shares.”
Robinhood Stock Tokens’ Backing
Amid the ongoing discussion, many people have questioned whether the AMC tokens in Robinhood actually represent ownership in their underlying assets. Tenev pointed out that each token represents a 1:1 economic exposure to underlying shares, with the same ratio of backing in shares held in custody.
However, the Robinhood CEO reminded investors that holders of tokenized stocks do not enjoy the same direct voting rights and dividend eligibility as regular shareholders.
“I think one thing, just to clarify, is these shares are 1-to-1 backed by the underlying at the issuer,” said Tenev in another interview. “And we’ve been iterating on the structure since we launched our classic stock tokens in Europe a little bit over a year ago.”
Despite its CEO’s assurances, critics requested an independent audit to determine whether Robinhood is indeed holding genuine shares of its token’s underlying assets or merely creating synthetic derivatives.
