The tokenized stock let holders track the private company’s price, but did not offer OpenAI equity or voting rights.
Robinhood CEO Vlad Tenev conceded his company’s recent foray into offering tokenized stocks has been contentious, to say the least — but remained steadfast in his commitment to expanding the initiative.
“Being the first to actually tokenize those great companies is a big milestone,” Tenev told Decrypt in an interview Friday. “Of course, every time you’re the first to do something interesting, it has some element of controversy.”
Earlier this month, Robinhood rolled out a giveaway of tokens, issued on Ethereum layer-2 network Arbitrum, representing stock in private companies including OpenAI. The OpenAI stock token, however, was not actually authorized by the artificial intelligence giant, which vigorously denounced the product as soon as it was announced.
The OpenAI stock token — which was airdropped exclusively in Europe — did not represent any actual equity in the company, or offer voting rights to holders. It merely tracked the perceived price of the company on secondary markets.
Tenev said that while he was certainly aware of the pushback from OpenAI, and the media impact of Robinhood’s splashy entrance into tokenized stocks, the executive remains focused on the potential of the emerging asset class, which he believes is huge.
“I don’t really think about the splash,” the CEO said. “It’s really about putting a real product in the hands of customers that’s useful, and I think [the launch] achieved that in a big way.”
Tenev said he’s eager to push forward with Robinhood’s tokenized stock initiative, which he’s recently said could soon spread to thousands of private companies.
“Now it’s just about expanding it to more companies, and figuring out a path to enable the DeFi phase two and phase three,” he added, referring to Robinhood’s longer-term plans of integrating its tokenized stock products with decentralized finance markets.
Robinhood’s bold tokenized stock rollout didn’t just attract the ire of implicated firms like OpenAI. It may have also attracted the attention of the SEC, which, just days after the product launched, issued a statement cautioning companies about the need to comply with securities laws when playing around with stocks — even when blockchain technology is involved.
“As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset,” SEC Commissioner Hester Peirce said. “Tokenized securities are still securities.”
“Accordingly,” she added, “market participants must consider — and adhere to — the federal securities laws when transacting in these instruments.”
Tenev pushed back on the notion that his company’s recent experimentations may have played a part in triggering the SEC’s warning.
“Commissioner Peirce’s reaction, I don’t believe, was specific to us,” the Robinhood co-founder said. “I think it was just a general statement that, ‘We’d like to see tokenization happen, we’d like it to happen safely, and we’re working on a framework.’ And of course, we’ve been a part of that.”
