Robinhood CEO says issuers should not veto tokenized stocks

Robinhood CEO Vlad Tenev stated that the company should not have veto power over tokenized stock products, provided that these products do not alter shareholder rights, issuer obligations, or the company's official stock register.

Tenev posted on the X platform that whether the issuer should participate depends on whether the tokenized product changes the rights associated with the underlying stock or creates new obligations for the company and its transfer agents. If so, the issuer should participate; however, if the product creates an independent financial instrument that holds or references freely transferable shares and does not change the issuer's rights, obligations, or shareholder register, then issuer consent is not required.

Tenev mentioned that Robinhood Stock Tokens use a third-party structure, with independently issued instruments backed by the underlying stock on a 1:1 basis, providing users with economic exposure to stocks and ETFs without altering the issuer's equity structure or the rights attached to the stock. He said, "Going on-chain should not grant the issuer veto power that they never had off-chain." Previously, AMC Entertainment CEO Adam Aron criticized Robinhood's tokenized stock products on September 4, stating that AMC has no association with these products and will require securities legal counsel to review them.