Robinhood bucked the trend, as the AMC battle tests issuers 'control of stock tokens

Robinhood's refusal to stop trading in AMC-related tokens has sparked a debate about listed companies 'control of third-party tokenization

Robinhood rejected entertainment company AMC's request to stop trading in blockchain-linked tokens related to its shares. The incident raises a broader question: Does a listed company have the right to interfere with the tokenization of its shares by third parties?

The dispute between Robinhood and AMC on the X platform not only affects the two companies, but also involves listed companies whose shares may have been tokenized without their knowledge, and investors who purchase stock-tracking products but have not become shareholders.

By refusing to stop trading these tokens, Robinhood is testing the boundaries of third-party tokenized shares under current securities laws. The controversy has also raised concerns about ownership, control of the issuing company, fragmentation of liquidity and regulatory oversight.

"Let your lawyers come and we will educate them"

Dan Gallagher, Robinhood's head of legal, compliance and corporate affairs, a former member of the Securities and Exchange Commission, responded to AMC CEO Adam Aron. Gallagher said on X that Robinhood "knows a thing or two about U.S. securities laws" and will not be "DECIST"(he parody a spelling error in Allen's post). He added: "Let your lawyers come and we will educate them."

Robinhood CEO Vlad Tenev shared the news with a caption saying: "We support stock tokens."

Aron's allegations against tokens

Previously mentioned in the report that AMC CEO Robinhood provided tokens related to AMC and more than 190 other companies without knowledge and consent, and believed that the particular product did not comply with U.S. securities laws. He emphasized that AMC does not participate in or endorse these tokens in any way, and questioned the investor protection of token buyers.

Gallagher's arguments further sharpened the conflict. Aron explained that "DECIST" is a clever term that is a combination of "desist" and "de-cyst". Later, he directly challenged Robinhood's offshore structure, questioning why stock tokens that are not allowed to be sold or sold to U.S. residents would be promoted on U.S. websites. "If it's not illegal, it should be illegal," Aron wrote. In another message sent to Tnev, he accused Robinhood of "playing tricks on U.S. securities law" and said such practices endangered market integrity.

These charges depend on Aron's view of the law and do not mean Robinhood violated U.S. securities laws.

What does the buyer actually own

According to Robinhood's disclosure, stock tokens cannot be equated to the purchase of stocks. The company's documents characterize stock tokens as tokenized debt securities from Robinhood Assets (Jersey) Limited, providing economic exposure to the underlying securities but not conferring legal or beneficial ownership of the underlying securities.

Robinhood's FAQs on classic stock tokens clarified that European products are derivatives contracts. Consumers have no voting rights in the company, and Robinhood warns that if the company goes bankrupt, they could lose all their investment.

What are the boundaries of the SEC?

On January 28, 2026, the U.S. Securities and Exchange Commission (SEC) issued a joint employee statement distinguishing between securities tokenized by issuers and securities tokenized by unrelated third parties. Robinhood's business model falls into the latter category.

"The format of securities issuance... does not affect the application of federal securities laws."-- Employees of the SEC's Corporate Finance, Investment Management, and Trading and Markets divisions

The SEC statement states that securities issues should be registered unless exemptions apply. However, since this is an employee statement and not a rule or any formal guidance from the SEC, it does not create any legal obligations.

This is not the first time Robinhood has been in trouble due to issuer issues. It has been previously reported that OpenAI denied Robinhood tokens bearing its name last year, while Tenev reported that tokenize a company does not require the issuer's consent.

The market is growing faster than infrastructure development

The controversy comes against the backdrop of the rapid expansion of tokenized stocks. The size of tokenized shares increased from US$2.5 billion at the beginning of 2026 to US$13.4 billion on September 1. CoinGecko's 2026 Real World Assets (RWA) Report records that spot trading volume in tokenized stocks reached $15.1 billion in the first quarter. Robinhood drove this growth, listing more than 190 stock tokens. But infrastructure is still catching up.

RWA.xyz found that Robinhood's custom contracts may be misinterpreted by platforms that expect to comply with standard ERC-20 behavior and may not work smoothly with the DeFi protocol built around these standards. The broader RWA market faces similar liquidity restrictions. Stobox's Mid-Year Report 2026 quoted RWA.xyz data and pointed out that the value of on-chain RWA after excluding stablecoins in July was US$33.5 billion. Meanwhile, Cryptopolitan reported that AMC shares rose nearly 21% to $3.07 in after-hours trading after Allen posted.