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SEC Bans Vile Synthetic Stock Tokens
19 Sep
Summary
- SEC approved onchain stock trading, barring synthetic tokens.
- AMC CEO Adam Aron called Robinhood's tokens 'vile'.
- New rules require tokens to grant same rights as ordinary shares.
The US Securities and Exchange Commission recently approved the trading of stocks on the blockchain, while simultaneously prohibiting synthetic tokens from participating. This significant regulatory step aims to modernize American capital markets.
AMC's chief executive, Adam Aron, had publicly condemned Robinhood's synthetic stock tokens as "vile" and "outrageous," emphasizing AMC's lack of affiliation with them. Robinhood's CEO, Vlad Tenev, responded that controlling all products built on public shares is impossible.
The SEC's order mandates that venues must verify that tokenized stocks offer holders identical rights to ordinary shares. Before listing tokens from external firms, companies must notify the issuer and allow for objections, a condition matching AMC's concerns.
Robinhood has since stated its support for the SEC's innovation exemption, highlighting benefits like instant settlement and fractionalization. The company is now promising voting rights and redemption options for its tokens, aligning with the new regulatory framework.
