Robinhood CEO Vlad Tenev is challenging public companies that seek the ability to block tokenized versions of their shares, intensifying a broader debate over who controls financial products built around publicly traded stocks.

The dispute centers on Robinhood’s tokenized stock products and the company’s conflict with AMC Entertainment. Tenev maintains that companies should control the rights and obligations attached to their own shares. However, he argues that this authority should not extend to separate securities created by other firms that reference those shares.

Tenev Distinguishes Shares From Tokenized Securities

Tenev said whether an issuer’s consent is required should depend on how a tokenized product is structured. Robinhood’s Stock Tokens are issued by Robinhood Assets (Jersey) Limited and provide economic exposure to underlying stocks.

The products are not the same as direct ownership of the companies’ shares. Token holders do not receive shareholder rights, including voting rights, in the underlying companies. Robinhood says each Stock Token is backed one-for-one by the corresponding equity.

The underlying shares are held by a U.S.-based custodian, while the token represents a separate financial instrument. Robinhood currently offers the products only to eligible investors in certain markets outside the United States. That structure makes the distinction between exposure to a stock and ownership of the stock central to the dispute, including which rights remain with the underlying shares and which belong to token holders.

AMC Criticizes Robinhood’s Strategy

AMC CEO Adam Aron has strongly criticized Robinhood’s approach to tokenization. He argues that companies should not have their shares referenced in financial products without their involvement or approval.

The disagreement highlights a broader question for the growing tokenization industry: If a publicly traded stock can serve as the reference for a separate blockchain-based financial product, should the original issuer have the right to stop that product?

Tenev argues that distributing a financial product through blockchain technology should not create a veto that an issuer did not previously possess over other lawful uses of its publicly traded shares.

The debate also raises questions about voting rights and the shares backing tokenized products. Robinhood has not announced how it plans to handle the voting power associated with those underlying shares. Those unresolved questions, along with how issuer consent applies to differently structured products, are issues that regulators and market participants will continue to watch.

As tokenized stocks gain momentum, the dispute could influence how regulators and financial markets define the relationship between traditional securities and blockchain-based products.