Tenev's token defense: it's debt, not AMC stock

Robinhood CEO Vlad Tenev drew the line Wednesday, Sept. 9, in a CNBC Squawk Box interview: stock tokens should not automatically require the underlying issuer's consent, because the product is not an AMC share placed directly on a blockchain but a tokenized security issued by a separate entity and backed by the underlying shares. Issuers control the rights and obligations of the stock they issue, he argued, but they do not control other companies issuing their own securities that reference those shares.

Robinhood's product documentation, as reported by The Defiant, identifies Stock Tokens as tokenized debt securities of Robinhood Assets (Jersey) Limited, with each token backed one-for-one by shares held by a U.S. custodian; service-provider disclosures name Alpaca Securities LLC as broker and custodian. Token holders get dividend economics through a mechanism that reinvests cash distributions into more underlying shares and increases a multiplier on the token, but they do not get voting rights, Tenev acknowledged, and Robinhood has not announced plans for the voting aspect.

AMC chief executive Adam Aron attacked that gap on X on Sept. 4, writing that Robinhood's product decouples stock token ownership from a company's ability to control its own capital raising efforts. His objection is commercial as much as legal: the token exposes buyers to AMC's stock while giving AMC no new capital and giving token owners no shareholder rights.

Three weeks ago, Tenev pushed the SEC to open the US to tokenized stocks. Wednesday's interview supplies the legal predicate: a token that references a share without reproducing its rights falls outside the issuer-consent requirement. The SEC may accept that boundary. What the paperwork cannot fix is the gap Aron has seized on — holders take AMC's price without AMC's votes, and no announced mechanism connects the two. Aron may lose the consent fight and still be right about the product.