Tokenized stocks debate goes beyond issuer consent: Bitfinex

Bitfinex Securities has argued that the tokenized stocks debate must distinguish between third-party products and issuer-backed securities because each model gives investors different rights.

Tokenized stocks require clear investor rights

Bitfinex Securities Head of Operations Jesse Knutson told crypto.news that Robinhood CEO Vlad Tenev was “directionally correct” to reject a blanket issuer veto, but said the debate should focus on what each token represents, who may buy it and where it can trade.

Tenev has said companies should not control tokenized products that neither change their shareholder records nor create new duties for them. His comments followed objections from companies whose names and share prices have been used in stock-linked products without their involvement.

Knutson said traditional markets already allow third parties to create instruments tied to listed securities. Unsponsored depositary receipts offer one example, making the basic idea of an unaffiliated company issuing a product linked to a public stock familiar to financial markets.

“The debate shouldn’t really be ‘does the issuer get a veto?’ It should be: what exactly does the token represent and who can access it?” Knutson said.

For large public companies with liquid shares, he added, an unsponsored tokenized product may be easier to structure because investors have regular access to financial statements, public filings, and market prices. A token provider can use the listed security as a reference or hold shares to support the product, depending on its legal design.

Even so, identical company names can sit behind instruments with different legal terms. One token may act as a debt security that tracks a stock’s price, while another may represent a beneficial interest in shares held by a custodian. An issuer-sponsored security can place registered equity onchain and retain the rights attached to an ordinary share.

Robinhood’s products have already placed that distinction under scrutiny. In September, AMC Entertainment CEO Adam Aron rejected an AMC-linked token because the theater chain had not approved or participated in its creation.

Robinhood describes its transferable Stock Tokens as tokenized debt securities issued by Robinhood Assets (Jersey) Limited. Holders receive economic exposure to the referenced stock but do not become shareholders of the company or gain voting rights against it.

Private-company tokens carry added information risks

Knutson drew a sharper line around products linked to private companies, where ordinary token buyers may not receive the financial information available to existing shareholders.

“Unsponsored private equity is a lot more complicated due to potential information asymmetry. The underlying private investors in such scenarios will often have access to financials and reporting not typically allowed to be shared more broadly — while token investors trade only on headlines.”

Private shares lack the continuous disclosure, public filings and regular price discovery associated with exchange-listed companies. According to Knutson, creating a token around such an asset can leave its buyers trading with less information than investors who hold a direct stake in the private company.

OpenAI raised a similar concern over the nature of Robinhood’s products in July 2025, when the brokerage offered eligible European customers token exposure linked to OpenAI and SpaceX. OpenAI said the tokens were not its equity and that the company had neither partnered with Robinhood nor endorsed the product.

Robinhood said its OpenAI exposure came through a special-purpose vehicle holding an economic interest linked to the private company. Buyers therefore received exposure through Robinhood’s structure rather than shares issued directly by OpenAI.

Knutson’s comments do not treat every third-party product as improper. Instead, his argument separates the question of whether a product may exist from the disclosures investors need to understand its structure, counterparties, and limits.

Transfer controls can restrict where tokens trade

Beyond ownership terms, Knutson said tokenized securities require controls at the protocol level to stop transfers into sanctioned or prohibited markets.

“Listed companies obviously don’t want tokenized versions of their stocks ending up in sanctioned or prohibited jurisdictions,” he said.

A token can move between compatible blockchain addresses once transfers are enabled, creating a different distribution route from a conventional brokerage account. Compliance may therefore depend on smart-contract restrictions, approved-wallet lists, identity checks and redemption rules applied by the token issuer.

Robinhood currently bars U.S. persons from acquiring the Stock Tokens issued by its Jersey unit. Its documentation says the products have not been registered under the U.S. Securities Act and cannot be offered, sold, or delivered in the United States or to American investors.

The restriction means U.S. customers cannot use Robinhood’s blockchain tokens as a substitute for buying the referenced shares through a domestic brokerage account. American investors remain able to purchase ordinary listed stocks under the ownership, custody, and disclosure rules that govern U.S. securities markets.

A recent Robinhood and AMC dispute also brought the Securities and Exchange Commission into the discussion. Aron said AMC could ask the agency to review the token, although neither an SEC action nor a lawsuit over the product had been announced at the time.

Knutson also identified price discovery as a concern when stock tokens trade on platforms with limited market surveillance. Weak monitoring could matter when a token changes hands outside the hours of the exchange where the referenced stock is listed.

U.S. shares generally stop trading on their primary exchanges at set times, while blockchain markets can operate continuously. Prices on decentralized venues may therefore move when the underlying stock market is closed, particularly during weekends or American holidays when traders cannot immediately arbitrage differences against the listed share.

Tokenized stock models offer different protections

Competition among issuers has produced several structures rather than a single standard for tokenized stocks. Coinbase, for example, introduced products on Base in August that represent beneficial interests in shares held through segregated custody.

The initial Coinbase offering included tokenized versions of Nvidia, Meta, Apple, and Alphabet. As previously covered in August, Alpaca Securities buys and holds one underlying share for each token at issuance, while a Coinbase-controlled company in the Abu Dhabi Global Market formally issues the securities.

Coinbase’s prospectuses distinguish beneficial ownership from being listed as the legal owner on the public company’s shareholder register. Verified holders may submit voting instructions, although the issuer’s ability to act on them remains subject to legal, operational and timing limits.

Other differences extend to dividends, redemptions, and insolvency claims. Coinbase’s documents say dividends are generally reinvested after fees and applicable U.S. withholding tax, while verified holders may request redemption in shares, dollars or an accepted stablecoin. Robinhood’s tokens place contractual claims against its Jersey issuer rather than against the company whose stock supplies the reference price.

“In the latter case, one of the biggest advantages of tokenization is actually the ability for issuers and investors to interact more directly, with greater transparency over ownership and potentially greater control over how the security operates,” Knutson said about issuer-sponsored products.

Both sponsored and third-party structures may remain in the market, he added, making the legal design important to an investor’s decision.

“The market is likely to have both models, but investors need to understand which one they’re buying.”