AMC CEO demands Robinhood halt token as SEC weighs 24-hour trading

AMC Entertainment Chief Executive Adam Aron demanded Robinhood halt its AMC stock token, a synthetic-equity dispute that lifted the shares more than 10 percent as the SEC weighs 24-hour trading rules.

"The list of concerns is almost existential," Aron said in a post on X, calling Robinhood's product a "quasi-fake market" that strips investors of shareholder rights and undermines the company's ability to raise capital. Robinhood Chief Executive Vlad Tenev responded by asking "what's the concern?"

The clash began Thursday when Aron said AMC had no involvement with the token, which Robinhood issues through an entity registered in Jersey, an offshore island roughly 3,000 miles from the US mainland. The products are not available to US customers and are not registered under US securities law. AMC shares rose more than 10 percent intraday Friday while Robinhood fell nearly 4 percent.

The dispute now reaches the SEC, which has scheduled a September 17 roundtable on 24-hour US stock trading — the framework under which tokenized equities would operate. The stakes are rising as the tokenized stock market reaches $3.6 billion, with Citi projecting $5.5 trillion of assets could be tokenized by 2030, including $2.7 trillion of equities.

A token is not a share

The fight cuts into a fault line in stock tokenization as crypto firms, fintechs and Wall Street institutions race to put equities on blockchain rails. Robinhood's tokens are synthetic wrappers that track a stock's price without making the holder a registered shareholder. Other models back tokens with shares held at a regulated custodian, while issuer-sponsored approaches put actual company shares onchain with voting rights attached.

That distinction matters because a synthetic AMC token may follow the share price without carrying voting rights, appearing on the company's shareholder register or being recorded as ownership. "A token is not equity, but equity can be a token," Joris Delanoue, chief executive of blockchain transfer agent Fairmint, said. "If the holder is not on AMC's official ownership record, the token is not an AMC share."

Executives who otherwise favor tokenization backed Aron's concern. Armani Ferrante, chief executive of crypto exchange Backpack, said buying a Robinhood token does not necessarily translate into buying the underlying stock, since retail investors cannot redeem tokens directly for shares. Graham Rodford, chief executive of UK-regulated exchange Archax, drew a sharper line: "A tokenized stock should mean the stock, tokenized."

Carlos Domingo, chief executive of tokenization specialist Securitize, pointed to a wide dislocation in one AMC-linked trading pair that traded at roughly 60 times AMC's reference share price — evidence that thin liquidity and fragmented markets can push a token far from the stock it tracks. "Tokenization was meant to improve markets, not make them worse," he wrote.

Momentum outpaces the rules

The governance dispute has not slowed the push toward tokenized equities. Nasdaq and the New York Stock Exchange are both developing tokenized stock plans, and Robinhood is building its own blockchain to support the assets. The pattern of companies objecting to unauthorized tokens is established: OpenAI last year disavowed Robinhood tokens tied to the private AI company, saying it neither partnered with nor endorsed the offering.

For AMC, the fight echoes the 2021 meme-stock saga, when Robinhood temporarily restricted buying in the theater chain's shares during a retail frenzy. Aron, who used social media to rally retail investors and raise hundreds of millions of dollars during the pandemic, said AMC will raise the issue with the SEC and has asked outside securities counsel whether it can force Robinhood to stop.

The September 17 roundtable will test how the SEC treats products that carry a public company's ticker without its consent — and whether the agency draws a line between a tokenized share and a derivative that merely tracks one. Until then, the legal status of synthetic equity remains unresolved.

This article is for informational purposes only and does not constitute investment advice.