The SEC Just Drew a Line in Tokenized Stocks — and the AMC Feud Shows Why

Five years ago, Robinhood and AMC were the twin faces of the meme-stock era. Now their CEOs are publicly at war over tokenized stocks — and the SEC has picked a side.

AMC CEO Adam Aron says Robinhood tokenized AMC's stock without the company's consent, calling the product "vile." Robinhood CEO Vlad Tenev responded that consent isn't required and that the product merely meets international demand for U.S. equity exposure, according to a CoinDesk opinion piece published October 1.

Wrappers versus ownership

The disputed tokens are debt securities issued by a Robinhood offshore subsidiary. They track the stock's price but give buyers no ownership of the underlying shares — what the industry calls synthetic "wrappers." The wrapper touches U.S. markets only once, when the issuer buys shares to hold as collateral; from then on, trading happens offshore between token holders, with none of the demand flowing to the exchanges where the actual shares trade.

The author's argument: multiply that mismatch across nearly 200 U.S. companies already tokenized this way — in a market Citi projects could reach $2.7 trillion by 2030 — and the opportunity cost to American companies and portfolios compounds. Synthetic tokenization, the piece argues, shortchanges the public by inserting intermediaries between global demand and U.S. markets.

The SEC's answer

On September 17, the SEC's long-awaited "innovation exemption," which lets blockchain venues list and trade tokenized securities, excluded synthetic tokens outright. Qualifying tokens must represent real ownership, and in Chairman Paul Atkins' words, they "must provide holders with the same rights and privileges as the traditional securities," including dividends and voting. The exemption even requires that companies get notice and the right to object before a third party tokenizes their shares — a direct answer to AMC's complaint.

The digital-twin alternative

The better model, the author writes, already exists at the center of U.S. markets: tokenizing a share as a digital twin of a security custodied at the Depository Trust Company, the custodian of virtually every publicly traded U.S. share. Under the tokenization service DTCC plans to launch this year, the token and the traditional share are one asset in two forms — the share never leaves the national clearing and settlement system, so a foreign investor buying the token through a licensed venue deepens the same market Americans trade in.

The stakes

Global investors will reach U.S. equities one way or another. Done with real ownership, the author argues, tokenization could deliver a generational influx of investment into American markets that trade around the clock, settle more efficiently, and remain the deepest in the world. Done synthetically, it's fee capture dressed up as access.

Crypto prices are volatile and the figures above reflect the reporting of the cited sources at the time of publication.

Written by the BidAsk Newsroom. Based on reporting from the sources below.