Robinhood CEO Vlad Tenev said public companies should not automatically have the right to block the tokenization of their shares when the relevant product does not change an issuer’s rights or obligations. He set out his position after AMC Entertainment CEO Adam Aron criticized Stock Tokens linked to AMC shares, as the spread of share tokenization raises questions about whether issuers must consent to such products.

Aron said Robinhood’s tokens linked to AMC and the shares of more than 190 other issuers were not registered under U.S. securities laws. He also said AMC was not involved in their launch and did not approve of the practice.

Against that backdrop, a memecoin called MEME appeared on the Robinhood Chain network and was tied to tokenized AMC. Its fully diluted valuation, or FDV, jumped 206,400% in one day.

Tenev said Robinhood had seen strong demand for products giving investors outside the United States onchain access to U.S. stocks and exchange-traded funds since launching Stock Tokens a little more than two months earlier.

“Everyone should be able to access high-quality financial assets, wherever they live. At Robinhood, we’ve been working to make that vision real at global scale, starting with US stocks,” Tenev wrote.

Three principles for issuer consent

Tenev based his position on three principles: investor rights, issuer authority and technological neutrality.

Under the investor-rights principle, shares in public companies are property that can be transferred freely, and holders should generally decide how to store and use those assets, according to Tenev.

On issuer authority, he said companies control the rights associated with the securities they issue but do not control every financial product that other market participants create using those securities. Under technological neutrality, he said the requirement for issuer consent should depend on the rights and obligations a product creates, rather than on whether it uses blockchain technology.

Tenev said a company should participate when a product changes the rights associated with the underlying shares, replaces the company’s official shareholder register or creates new obligations for the issuer or its transfer agent.

By contrast, he said issuer consent should not be mandatory when a separate financial instrument holds or references freely transferable shares without changing the related rights, obligations or official shareholder register.

“A company should control the rights attached to its shares—not every lawful use of those shares once they’re in investors’ hands. Going onchain shouldn’t give the issuer a veto it never had offchain. And issuers certainly shouldn’t block an entirely new group of investors simply because they don’t understand the technology yet,” Tenev said.

Robinhood’s Stock Token model

Tenev described several approaches to tokenizing shares. An issuer can move its own shares onchain, an intermediary can tokenize ownership of underlying shares, or a third party can issue a separate instrument backed by or linked to those shares.

Robinhood uses the third model. Its Stock Tokens are separately issued financial instruments backed 1:1 by underlying shares. They provide economic exposure to those shares but do not change companies’ capitalization, rights or official shareholder registers, according to Tenev.

He said the structure should allow Robinhood to expand the product across jurisdictions and cover thousands of stocks and ETFs without involving each issuer in the launch of each tokenized product.

Lawyers previously expressed a similar view to Incrypted when discussing issuer and investor rights in stock tokenization. The debate comes as the tokenized-asset segment expands: memecoin launchpad pump.fun has introduced a Custom Pairs feature that lets users create Solana-based tokens pegged to tokenized stocks, major cryptocurrencies, metals and other assets.

Source: Incrypted