- AMC CEO Adam Aron questioned whether Robinhood stock tokens remain fully 1:1 backed when underlying shares are lent to short sellers.
- Aron criticized Robinhood for promoting the product in the U.S. despite company disclosures that restrict sales to U.S. persons.
- Robinhood CEO Vlad Tenev defended the token structure, stating each token is a debt security backed by a single share held as collateral.
- SEC Commissioner Hester Peirce said tokenization does not alter a stock’s legal status and securities laws still apply.
AMC Entertainment CEO Adam Aron late Saturday directly questioned Robinhood Markets CEO Vlad Tenev and Chief Legal Officer Dan Gallagher about whether the company’s Stock Tokens remain fully collateralized when underlying shares are lent to short sellers. Aron wrote on X to both executives, who had spent the past week publicly defending the product. He called the practice of tokenizing shares without full backing “abhorrent” and said it undermines the ethos of share ownership.
Aron specifically challenged Robinhood’s promotion of Stock Tokens on its U.S. website despite company disclosures stating the products cannot be offered or sold to U.S. persons. He also criticized the brokerage for establishing an operation in Jersey to avoid U.S. securities laws, asking how a former SEC commissioner like Gallagher could believe a world without those safeguards was safer for investors.
Tenev responded to the criticism last week by telling CNBC that each token is a debt security backed by a single share held as collateral. He noted that token holders receive dividends but cannot vote, and that issuers only control the rights and obligations of the stock they sell, not everything else about it.
SEC Commissioner Hester Peirce said in an interview with Coinage that tokenization is “enchanting but not magical” and does not change a stock’s legal status. She emphasized that regulators need to clarify where tokenized stocks can be bought and sold and whether holders receive the same dividends, voting rights, and protections as regular shareholders.
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