AMC CEO Condemns Robinhood’s Unauthorized Stock Tokenization

Adam Aron, the chief executive of publicly traded AMC Theatres, has sharply criticized Vlad “Vlad” Tenev, the CEO of Robinhood Markets, for launching tokenized stocks bearing the company’s name. Aron accused Robinhood of leveraging synthetic shares to circumvent US securities laws, sparking a heated debate among industry stakeholders.

Key Features of Robinhood’s Stock Tokens

Robinhood’s “Stock Tokens” are tokenized real-world assets that leverage the Robinhood Chain, a Layer-2 Ethereum-compatible blockchain built by the trading platform. The instruments are issued by Robinhood Assets, the company’s Jersey-registered entity.

According to Robinhood, Stock Tokens provide investors with economic exposure to underlying securities, including US shares and exchange-traded funds (ETFs). However, they do not grant investors legal or beneficial rights in, or against, the issuers of those underlying securities.

Robinhood issues Stock Tokens as standard ERC-20 tokens, deriving their value from Chainlink’s (LINK) live Price Feeds, which bridge real-world data onchain. Holders can trade, transfer, and integrate these assets into onchain applications. A standout feature is their self-custodial and 24/7 nature, allowing users to store them in crypto wallets and manage or trade them around the clock.

To date, Robinhood’s Stock Tokens provide exposure to over 190 companies and ETFs, including shares of NVIDIA, Apple, Google, and AMC. Operating outside of US securities laws, Robinhood has excluded US residents and enterprises from engaging with the product. Similar restrictions apply to residents of Canada, Switzerland, the UK, and other jurisdictions, while international sanctions prevent the offering of RWA tokens in Iran, North Korea, Russia, Venezuela, Ukraine, and other classified Prohibited Investors.

AMC CEO Adam Aron’s Criticism of Robinhood’s Move

Quoting Robinhood’s product description, Aron highlighted that the tokens fall outside the range of US securities laws. He described the company’s tactic as “contemptible, outrageous, disgusting, detestable, inexcusable, [and] vile.”

Aron clarified that AMC has no connection with the tokens in question and does not condone their trade or distribution. He stated that the company’s securities counsel is actively studying the issue. In response, Tenev dismissed Aron’s concerns with a simple “What’s the concern?”

Aron emphasized that US securities laws exist to protect investors and that companies allocate millions of dollars annually for compliance. He argued that Robinhood’s actions undermine these efforts and create an unfair playing field by operating from jurisdictions outside the US.

Furthermore, Aron argued that unauthorized stock tokens dilute AMC and other companies’ capital-raising controls. He noted that AMC’s past issuance of equity to strengthen its balance sheet was vital to its success. He explained that Robinhood’s “fictitious synthetic equity market” decouples stock token ownership from the entity it represents.

Aron also pointed out that this model deprives shareholders of perks guaranteed under regulated markets, including voting rights, attendance at shareholder meetings, and receiving formal corporate disclosures or notices.

The AMC CEO stated that the “quasi-fake market” Robinhood created on the island of Jersey is eroding public trust in financial institutions. He demanded that the trading platform “voluntarily cease and desist” from trading AMC stock tokens, warning that legal action would follow.

Additionally, Aron blasted the US Securities and Exchange Commission (SEC) for its failure to intervene as companies bypass securities laws under the guise of wrapped stocks.

Robinhood’s Response to AMC’s Potential Lawsuit Buildup

Dan Gallagher, a former SEC commissioner and now Robinhood’s Chief Legal Officer, accepted Aron’s challenge. He urged the company to send its lawyers so they could “educate them,” a response that Tenev strongly supported.

Aron later conceded that the Stock Tokens may be legal outside US jurisdiction. Nonetheless, he believes they display a “terrible lapse of judgment on Robinhood’s part.” He specifically questioned the company’s practice of advertising its tokenized stocks on its US site.

“By your own admission, in this instance you are not adhering to US securities laws, and therefore you cannot offer or sell these offshore island of Jersey tokens to US persons,” Aron reasoned. “And yet, your company boasts about them on your US website. This is a practice that you should not be standing behind.”

Some observers rallied behind Robinhood, admonishing Aron for hypocrisy following the 2021 meme stock mania. During that period, Aron had promoted AMC stocks to “apes”—a dedicated group of retail traders applying coordinated buying pressure—only to sell millions of dollars in his personal holdings while repeatedly diluting AMC’s stock through massive equity offerings to pay off corporate debt.

These business decisions shifted sentiment against the stock, raising doubts about the company’s long-term sustainability. Worse, the dilution further exacerbated investors’ losses by eroding shareholder value.

Robinhood’s RWA Tokens

Amid the heightened debate, Robinhood’s RWA value surpassed $161.88 million over the weekend, according to RWA.xyz data. AMC accounts for roughly 4.69% of the trading platform’s tokenized stocks, with a total asset value of $7.6 million.

In the stock market, Robinhood now has a market cap of $109.79 billion, while AMC is valued at $2.37 billion.

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