AMC CEO Claims Robinhood Stock Tokens Are 'Fake Stocks,' Robinhood Responds

Robinhood has promised to provide stock token holders with voting rights and actual shares, aiming to dismantle legal arguments against them.

The proposal was announced just 10 days after AMC CEO Adam Aron labeled the same tokens as 'fake stocks' and demanded a sales halt. Robinhood's stock tokens are not actual shares but rather IOUs, issued by Robinhood Assets (Jersey) Limited, registered on a small island in the English Channel. The company operates without separate regulation, with each token tracking share prices and paying cash dividends.

The tokens do not grant ownership, voting rights, or inclusion on shareholder lists, nor can they be exchanged for actual shares. Robinhood stated that two of these aspects will change. CEO Vlad Tenev confirmed the plan but did not specify implementation dates, applicable countries, or eligibility requirements.

Adam Aron, who runs AMC, dismissed the tokens as 'disgusting' on September 4 and declared them unrelated to his company. On the same day, AMC shares rose 15% to $2.92. His argument centers on AMC spending millions annually to comply with U.S. securities laws while Robinhood sells a product using AMC's name from a jurisdiction 3,000 miles away.

The total market value of AMC tokens is approximately $2.8 million, compared to AMC's $2.6 billion market capitalization. Analysts noted that Aron's next move would determine whether the dispute remains a debate or becomes a test case for tokenized stock regulations. Robinhood moved first and did not back down.