AMC CEO Condemns Robinhood for Tokenizing Company Stock

The CEO of AMC Entertainment Holdings publicly condemned Robinhood for tokenizing AMC stocks on a blockchain without the company's permission. He described the brokerage's actions as "contemptible, outrageous, disgusting, detestable, inexcusable, vile."

Robinhood's CEO defended the move, stating that a company cannot totally limit what buyers do with its stock. The brokerage employs a wrapper model, purchasing batches of stock and creating tokenized versions through Alpaca, a FINRA-registered intermediary. This system provides customers with financial claims and lowers entry barriers for international investors in markets such as South Africa and Brazil.

The dispute occurs as the broader financial industry explores blockchain integration. Nasdaq recently invested $100 million in the blockchain-native firm Payward, and the United States Securities and Exchange Commission is developing an innovation exemption for on-chain stocks. Despite these advancements, critics warn that token holders may lose voting rights and that fraudulent outfits could offer unbacked tokens.