Robinhood Co-Founder Publishes Long Article on Stock Tokenization: Tokenizing stocks on-chain does not alter their underlying attributes, and stock issuers have no right to prevent this.

Robinhood co-founder Vlad Tenev published a lengthy article early this morning outlining Robinhood’s vision to enable global investors, especially non-U.S. users, to gain exposure to U.S. stocks and ETFs via blockchain, with a key focus on whether issuers need to consent to the tokenization of their stocks. Tenev argues that public company stocks are freely transferable personal property, and their owners should have the right to decide how to hold and use them. Issuing companies control the rights attached to their issued securities, but they do not control all third-party financial products built around those securities—a well-established precedent in financial markets, as seen in unsponsored ADRs, options, and structured products. Accordingly, if a product alters the rights of the underlying shares, replaces the company’s official shareholder register, or imposes new obligations on the company or its transfer agent, issuer involvement is required. If it merely creates an independent financial instrument that holds or references freely transferable shares on a 1:1 basis without modifying the issuer’s rights, obligations, or official shareholder records, no issuer consent is necessary. Robinhood operates on a model where third parties issue independent instruments backed 1:1 by underlying shares. Tokenizing stocks should not grant issuers veto powers they did not previously hold, nor should it bar new investors from entering the space solely because issuers are unfamiliar with new technologies. Last week, AMC’s CEO criticized Robinhood’s so-called "synthetic equity market," warning that stock token trading could decouple from listed companies’ financing arrangements, and demanded Tenev and Robinhood halt AMC stock token trading. The ensuing debate has sparked lively discussions across crypto and stock communities.