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Robinhood’s move into tokenized securities is facing regulatory headwinds in the European Union, following concerns that its so-called OpenAI and SpaceX private equity tokens may mislead investors about their connection to the companies they reference.
Although marketed as offering exposure to high-profile private companies, Robinhood’s tokens do not represent actual equity stakes in OpenAI or SpaceX. Instead, they are derivative-based instruments designed to mimic the value of shares in these companies — a key detail that has triggered official scrutiny.
The issue came to a head after OpenAI publicly clarified that Robinhood’s tokens do not equate to ownership or direct investment in the company. That warning has prompted an investigative response from Lithuania’s central bank, Robinhood’s primary regulator within the EU.
“We are awaiting further clarification from Robinhood regarding the nature and compliance of these instruments,” said Giedrius Šniukas, spokesperson for the Bank of Lithuania, in a statement to CNBC. “Only after reviewing this information can we evaluate their legality under EU financial regulations.”
Tokenization Push Meets Regulatory Resistance
Robinhood’s tokenization strategy culminated with the June 30 launch of its layer-2 blockchain, designed to support tokenized securities within the EU. The platform aims to roll out more than 200 tokenized U.S. stocks and ETFs to European investors — part of a broader effort to democratize access to financial markets through blockchain-based infrastructure.
But its private equity tokens, particularly those referencing non-publicly traded companies like OpenAI and SpaceX, are drawing regulatory concern. Critics say the tokens could be misunderstood by retail investors as actual shares, despite legal disclaimers describing them as derivative contracts.
A visual slide from Robinhood CEO Vlad Tenev’s recent EthCC presentation, recreated by Galaxy Research, outlines the firm’s tokenization framework, clarifying that these instruments provide indirect exposure rather than ownership.
“These are not tokenized equities in the traditional sense,” noted Galaxy Research. “They are synthetic representations, with risk profiles similar to CFDs or other derivative instruments.”
Tokenization: A Growing but Murky Market
Robinhood is one of many fintech firms racing to capture a slice of the $24 billion tokenization market, a sector drawing increasing interest from institutional players like BlackRock and Franklin Templeton.
While tokenized private credit and U.S. Treasuries currently lead the market in volume and maturity, tokenized equities — particularly those referencing private companies — remain in a regulatory grey zone, legal experts say.
A report by RedStone highlights that tokenization has reduced friction in private markets, improving liquidity and settlement speeds. Still, stocks account for just $188 million of the total market — a sliver of what could become a trillion-dollar opportunity, according to executives at the recent Tokenize This conference in New York.
“The potential is massive,” said one panelist, “but tokenized equities must be built on a foundation of transparency and regulatory alignment if they are to scale responsibly.”
As scrutiny intensifies, Robinhood’s ability to navigate EU compliance requirements — especially around financial disclosure and investor protections — may determine whether its tokenization vision flourishes or stalls under regulatory pressure.
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