Robinhood Under Fire Over Tokenized Stocks Amid Regulatory Scrutiny in Europe

In Brief:

Robinhood is in talks with EU regulators about its tokenized stock offering, following backlash from companies like OpenAI.

Concerns revolve around tokens for unlisted firms and whether they mislead users about equity ownership.

Robinhood is facing growing scrutiny in Europe after launching a tokenized stock trading product that allows users to buy blockchain-based representations of U.S. equities—including private firms like OpenAI.

CEO Vlad Tenev confirmed that the company is actively engaging with regulators after several entities raised concerns about the offering. The product rollout, announced last week, enables EU-based retail investors to trade tokens tied to both publicly and privately held U.S. stocks via Robinhood’s app.

Controversy erupted when OpenAI, one of the private firms included in the offering, publicly disassociated itself from the tokens. The AI company warned that the "OpenAI tokens" do not represent official equity and were not authorized by them.

Now, regulators—particularly the Lithuanian central bank—are examining whether the structure of Robinhood’s tokens confuses users about the difference between real equity and synthetic assets. The inquiry includes whether these tokens function more like derivatives or fall into a regulatory gray area.

Robinhood has not yet provided full details on how the tokens are backed or structured, further fueling debate. The outcome of these regulatory discussions could shape the future of tokenized assets in Europe and beyond.

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