Tenev Rejects Issuer Veto Over Stock Tokens
Robinhood's CEO Vlad Tenev has sparked controversy over the company's stock tokens by arguing that public companies should not have veto power over third-party tokenized products. In a September 11 post, Tenev stated that issuer consent should depend on the legal structure of a tokenized product, not its use of blockchain technology.
Tenev divided tokenized stocks into three possible structures and emphasized that an issuer should participate when a product changes the rights attached to its stock or creates new duties for the company. However, he argued that consent should not be required when a separate instrument merely references freely transferable shares.
Robinhood uses the third-party model, where public disclosures describe Stock Tokens as debt securities that track underlying equities but do not make token holders shareholders of the referenced companies. The structure resembles a category recognized by the SEC's staff in a January joint statement separating issuer-sponsored tokenized securities from products created by unaffiliated third parties.
The controversy revolves around AMC Entertainment, which has objected to Robinhood's AMC stock token and threatened legal action against the company. However, no court or SEC ruling has settled whether Robinhood's structure requires consent from referenced issuers.