Web3 Lawyer Analysis: The Innovation and Controversy of Robinhood Stock Tokens

Recently, the well-known American internet brokerage Robinhood announced the launch of "stock Token" products linked to the equity of unlisted companies in Europe, attracting widespread attention. This innovative attempt once again brings the tokenization of real-world assets (RWA) into the spotlight, and has also sparked numerous controversies. This article will delve into the background, operational model, and potential impacts of this event.

Event Background

Robinhood is a financial technology company headquartered in California, primarily providing commission-free trading services for retail investors in stocks, options, ETFs, and cryptocurrencies. The company has established a European business center in Lithuania and has obtained the relevant financial licenses.

At a European finance summit, Robinhood announced the launch of "stock Token" products for users in the EU and the European Economic Area, allowing investors to trade various US stocks, including those of private companies, in token form using blockchain technology. Among them, the most notable are the stock Tokens of OpenAI and SpaceX.

However, OpenAI quickly issued a statement emphasizing that these tokens do not represent the company's real equity, and OpenAI has not collaborated or authorized Robinhood. This has raised questions in the market regarding the compliance and legitimacy of the product.

Operation Mode Analysis

The so-called "OpenAI Token" is essentially a blockchain contract that is linked to the value of the OpenAI shares held by Robinhood in the special purpose entity (SPV). Robinhood connects the token price to the value of the OpenAI shares in the SPV by holding equity in the SPV that controls a certain number of OpenAI shares.

Token holders do not directly own equity in OpenAI, but rather gain an indirect exposure related to the price of OpenAI shares within the SPV. From a legal perspective, token holders do not possess voting rights or other shareholder rights, nor do they have actual ownership of OpenAI or the SPV; it is more akin to owning a "valuation tracker."

Robinhood launched this product mainly to address market pain points such as low accessibility to quality unlisted assets and high thresholds for traditional private equity investments, while also leveraging the brand effect of popular companies like OpenAI to attract investors.

Regulatory Situation

Currently, Robinhood's stock tokens are primarily regulated by the Lithuanian Central Bank and the European Union. The Lithuanian Central Bank has launched an investigation, requesting Robinhood to provide relevant details. This product is issued as a derivative under the MiFID II regulatory framework, and may also need to comply with ESMA regulations as trading volume increases. If it enters the US market in the future, it will also face SEC regulation.

Returns and Risks for All Parties

For investors, there may be profits from the future valuation growth of OpenAI, but they also face the risk of valuation fluctuations and do not enjoy true shareholder rights. For Robinhood, it can expand into the European market and increase revenue, but it also bears market risk and credit risk.

Differences from Traditional RWA Projects

Compared to traditional RWA projects, Robinhood's stock tokens are significantly different in terms of asset types, issuers, regulatory environments, and investment thresholds. Their innovation and controversy are both higher.

Conclusion

Robinhood's attempts reflect the innovative spirit of breaking through traditional financial boundaries in the Web3 space, but they also raise concerns about compliance, investor protection, and other issues. Both investors and industry practitioners should approach this emerging model with caution, weighing its opportunities and risks.