The Nasdaq's layout requires the issuance of equity tokens authorized by the issuer, while regulation has yet to be defined, with the market running ahead of the rules.

Written by: Conflux

On September 4, it was revealed that the on-chain stock token DEX trading volume of Robinhood has surpassed $3 billion within 63 days of its launch, covering more than 190 publicly traded companies, including AMC. However, Adam Aron, CEO of AMC, the largest cinema chain in the U.S., publicly stated that AMC has nothing to do with these tokenized stocks, expressing dissatisfaction with terms like "despicable," "shocking," and "disgusting," and stated that he has requested an external securities lawyer to investigate their legality. This tweet quickly became a meme in the community—someone interpreted AMC as "A Meme Coin," issuing a meme coin called MEME (A Meme Coin), which surged over 100,000% to even 200,000% within hours, with some early wallet holders realizing paper profits of over $2 million. AMC itself hasn’t successfully "protected its rights," but others have already made a profit from this verbal battle.

This dispute has lasted for nearly two weeks, with no concessions from either side, and the argument has not produced any results: once stocks are publicly traded, aside from the issuing company itself, do others need to ask, "Do you agree?" before they can create financial products around it?

Two months, 190 stocks

In July this year, the Robinhood Chain mainnet was launched, and in two months, more than 190 U.S. stocks and ETFs have been tokenized, covering non-U.S. users in over 120 countries and regions. Structurally, these tokens are issued by an offshore entity, Robinhood Assets (Jersey) Limited, essentially a "debt security," held by licensed custodians who own the corresponding real stocks as a 1:1 collateral; buyers receive price exposure, not shareholder status, and have no voting rights, with Robinhood having included these terms in the disclosure documents from the beginning.

The problem is that AMC was never asked "Do you want to?" Robinhood's position is clear: once stocks are publicly traded, they are property that investors can freely transfer, and others can issue derivatives around them that do not alter shareholder rights without the approval of the issuing company.

Agreement rights, what are the three sentences

On September 11, Robinhood CEO Vlad Tenev published a lengthy article summarizing this debate into three principles: investors own property rights to freely transferable stocks; the issuing company can only control the rights attached to its own issued securities and cannot manage other financial products created around that stock; technology neutrality—whether or not to use blockchain should not change who has consent rights. He articulated it directly: once stocks are on-chain, the issuing company should not gain a veto right it never had offline.

This reasoning sounds clear, but AMC has always been poking at the same point. On September 12, Aron publicly questioned: if the real stocks used as collateral are simultaneously lent to short sellers for selling short, can this token still be considered truly 1:1 backed? As of the time of publication, Robinhood has not provided a direct answer. This is also a technical detail that can easily get drowned out in the "who is right" debate: whether 1:1 is "the accounts match" or "this batch of stocks hasn't been moved to do something else" can currently only be determined by Robinhood itself.

Five years ago vs. now

To understand why Aron reacted so strongly this time, we need to go back to the short squeeze in January 2021.

At that time, the short positions on GameStop exceeded the actual number of shares in circulation, and a group of retail investors gathered on Reddit's WallStreetBets, discovering this structural weakness: as long as they concentrated their buying to push the stock price up, shorts would be forced to cover their positions at high prices, and the buying for covering would continue to push the stock price higher. Retail investors also bought a large amount of call options, further amplifying the leverage. This short squeeze logic quickly spread from GameStop to a collection of other heavily shorted stocks with high retail attention, including AMC, Blackberry, and Nokia, collectively termed meme stocks. Robinhood, as the primary entry for retail trading at the time, was elevated to a pinnacle of public opinion by this narrative of "democratizing the financial market."

The turning point occurred on January 28. Due to market volatility, the clearing agency NSCC significantly raised the margin requirements for Robinhood. Robinhood subsequently restricted users from buying stocks like GameStop and AMC but did not prohibit selling. This quickly became another layer of concern for retail investors: why can they sell but not buy? They believed Robinhood was actually helping the short-selling institutions with significant closing pressure; Robinhood explained that this was to meet the dramatically increased capital requirements of the clearing system, avoiding inability to fulfill settlement obligations.

The two narratives ultimately did not reach a consensus in the court of public opinion. Subsequently, congressional hearings and class action lawsuits followed, and Robinhood and its executives faced inquiries and information requests from the SEC, FINRA, and judicial departments. At that moment, Robinhood's narrative of "allowing ordinary people to invest" collided head-on with the traditional financial infrastructure it relied on.

Five years later, it's interesting to see the positions of both sides have flipped. Back then, AMC and its retail shareholders were on the same side that was hurt by trading restrictions, and Robinhood was the one accused of "blocking ordinary people's trading rights." Today, Robinhood frames "being able to create products around stocks without the issuer's consent" as advocating for greater freedom of access for global investors, while AMC—once supported by the retail investors who were angry over trading restrictions—now demands "ask me for consent first," standing on the side of limitations.

There is also a layer of unchanged reality at stake: AMC was able to emerge from the brink of bankruptcy in 2021, thanks to the stock price propped up by that round of meme trading—by issuing new shares continuously amid high interest, the company linked fundraising with the support of retail investors. Robinhood's tokenized products, however, bypass this route: users buy third-party issued debt securities, money into Robinhood's custody accounts does not create new fundraising, and AMC doesn't see a dime. Retail investors' attention remains, but this attention no longer automatically flows back to AMC's funding accounts—this may be the real reason Aron is unsettled.

Interestingly, on the very day Aron publicly challenged Robinhood, AMC's own stock price actually rose nearly 6%—the dispute itself brought a wave of attention, but it remains to be seen whether this attention can translate into real cash on the company's books like in 2021.

The Nasdaq revealed another card

In the same week that Robinhood and AMC were embroiled in this fierce debate, Nasdaq quietly made a move. On September 10, Nasdaq's venture capital division announced a $100 million investment in Payward, the parent company of the crypto exchange Kraken, corresponding to a valuation of $21 billion, with plans to jointly promote "Nasdaq Equity Tokens" (NET), scheduled for launch in the second quarter of 2027.

This scheme is taking an entirely opposite route from what Robinhood is doing: NET clearly retains the issuing company's control over the stock, and token holders will have voting rights entirely equivalent to ordinary shareholders on the exchange. In other words, what Nasdaq wants to do is precisely what AMC is accusing Robinhood of lacking—that is, first obtaining the approval of the issuing company and then mapping the voting rights onto the chain as they are. In exchange, Kraken will also integrate Nasdaq's market surveillance system, covering cryptocurrencies, stocks, tokenized stocks, futures, and options.

This is where the true significance of this dispute lies. It is not just a battle of verbiage, but a competition of two sets of rules for "stocks on the chain," racing in the same time window: one set that has been operational for two months, covering over 190 stocks and 120 countries, but without the issuer's consent and no voting rights; the other set that will not launch until 2027 but brings the recognition of the issuing company and the complete retention of voting rights.

Slow rules, fast scale

Currently, there are three lines of this debate still hanging in the air: Robinhood has not answered the specific question of "whether the collateral stocks have been lent to short sellers"; the U.S. Securities and Exchange Commission issued a framework distinction between "issuer-driven tokens" and "third-party related instruments" in January and submitted a proposal for the modernization of transfer agent rules on September 1, but has not formally ruled whether structures like Robinhood's require the issuer's consent; European regulators have also warned that tokenized products might lead buyers to mistakenly believe they have the same rights as real shareholders.

Whether the stock market will reenact this scene still has no answer. Nasdaq's proposed "retaining consent rights" scheme will not undergo real market testing until 2027. But before that, Robinhood has already made over 190 stocks and on-chain trading in over 120 countries a reality.

The rules are still under discussion, and the market has already taken a step ahead.