AMC CEO Adam Aron Condemns Robinhood's Tokenized Stock Offerings

AMC Entertainment chief executive Adam Aron has condemned Robinhood for issuing tokens that track his company's share price without AMC's involvement, in a tweet on Wednesday.

Aron called the practice "contemptible, outrageous, disgusting, detestable, inexcusable, vile," said AMC has no connection to it and does not condone it, and asked how it could possibly be legal. He noted the tokens are not registered under U.S. securities laws, and said the company would instructing outside securities counsel to look into it "immediately." Robinhood's program covers more than 190 companies, he said.

Per Robinhood's own documentation, Stock Tokens are tokenized debt securities issued by Robinhood Assets (Jersey) Limited, and give holders economic exposure to a share price without any legal or beneficial rights in the underlying security or against the company that issued it. On that description, an AMC token holder has no claim on AMC at all.

The tokens are not registered in the United States and cannot be offered or delivered to U.S. persons, a term Robinhood's disclosures borrow from Regulation S. They are further restricted in Canada, the U.K. and Switzerland. The base prospectus was approved by Liechtenstein's Financial Market Authority under EU rules. Robinhood's issuer page says the Jersey entity "is not regulated," and that the consents it holds there amount to neither supervision nor endorsement.

Robinhood and tokenized stocks

The company airdropped tokens tracking OpenAI and SpaceX to European users last year. OpenAI said it had not partnered with Robinhood, was not involved and did not endorse the product, and that any transfer of its equity required approval it had not given. Chief executive Vlad Tenev called the launch a milestone and said thousands of private companies could follow.

Days after that rollout, SEC Commissioner Hester Peirce warned that blockchains do "not have magical abilities to transform the nature of the underlying asset."