Robinhood’s attempt to tokenize equity in high-profile
firms like OpenAI and SpaceX has come under scrutiny in the European Union,
following a sharp warning from OpenAI and a regulatory inquiry from Lithuania’s
central bank. The move now places the brokerage’s new product under legal and
reputational pressure less than a week after launch.
According to CNBC, the Bank of Lithuania confirmed on Monday that it had
contacted Robinhood seeking “clarifications” over the structure of its newly
launched OpenAI and SpaceX stock tokens.
OpenAI Rejects Links to Robinhood’s Token Product
Robinhood launched the blockchain-based stock token
product on June 30, allowing EU users to invest in shares of both public and
private companies. However, shortly after the announcement, OpenAI issued a
statement distancing itself from the product and warning that the tokens do not
represent equity in the company.
In response to OpenAI’s remarks, Robinhood stated that
its tokenized offering provides retail investors with indirect exposure to
private markets and is backed by the company’s ownership stake through a
special purpose vehicle.
Robinhood holds both a brokerage and crypto asset
service provider license in the EU, granted by the Bank of Lithuania, making
the country its lead regulatory authority in the bloc.
The case could serve as
an early test of how European regulators respond to the growing trend of asset
tokenization, particularly when tied to private companies that have not
consented to the use of their names or equity in such products.
Regulatory Oversight Tightens as Tokenization Expands
As scrutiny builds, the future of Robinhood’s stock
token strategy and broader investor trust in tokenized shares could hinge on
how the company navigates its obligations to regulators and the companies it
claims to offer exposure.
Expect ongoing updates as this story evolves.
Robinhood’s attempt to tokenize equity in high-profile
firms like OpenAI and SpaceX has come under scrutiny in the European Union,
following a sharp warning from OpenAI and a regulatory inquiry from Lithuania’s
central bank. The move now places the brokerage’s new product under legal and
reputational pressure less than a week after launch.
According to CNBC, the Bank of Lithuania confirmed on Monday that it had
contacted Robinhood seeking “clarifications” over the structure of its newly
launched OpenAI and SpaceX stock tokens.
OpenAI Rejects Links to Robinhood’s Token Product
Robinhood launched the blockchain-based stock token
product on June 30, allowing EU users to invest in shares of both public and
private companies. However, shortly after the announcement, OpenAI issued a
statement distancing itself from the product and warning that the tokens do not
represent equity in the company.
In response to OpenAI’s remarks, Robinhood stated that
its tokenized offering provides retail investors with indirect exposure to
private markets and is backed by the company’s ownership stake through a
special purpose vehicle.
Robinhood holds both a brokerage and crypto asset
service provider license in the EU, granted by the Bank of Lithuania, making
the country its lead regulatory authority in the bloc.
The case could serve as
an early test of how European regulators respond to the growing trend of asset
tokenization, particularly when tied to private companies that have not
consented to the use of their names or equity in such products.
Regulatory Oversight Tightens as Tokenization Expands
As scrutiny builds, the future of Robinhood’s stock
token strategy and broader investor trust in tokenized shares could hinge on
how the company navigates its obligations to regulators and the companies it
claims to offer exposure.
Expect ongoing updates as this story evolves.
This post is originally published on FINANCEMAGNATES.
