AMC's CEO Told Robinhood To Halt Its Stock Token. Robinhood Told Him To Send Lawyers
AMC CEO Adam Aron publicly demanded that Robinhood cease trading tokenized versions of AMC shares, claiming the unregistered securities violate U.S. law. Robinhood's chief legal officer rejected the demand, while the token's supply surged from roughly 158,000 to 1.5 million units within 18 hours as trading activity intensified.
Why It Matters
This dispute highlights the emerging tension between traditional securities regulation and blockchain-based financial instruments, raising questions about whether existing legal frameworks can effectively govern decentralized token markets that reference real-world assets without direct oversight from the underlying companies.
Key Facts
- AMC token supply growth: Increased from 157,844 to 1.5 million tokens in 18 hours
- Robinhood legal response: Dan Gallagher, former SEC commissioner, told Aron to 'Send your lawyers and we'll educate them'
- Trading volume: $200.8 million in 24-hour volume across 593,076 transactions
- Token jurisdiction: Stock tokens issued by Robinhood Assets (Jersey) Limited from Jersey, described by Robinhood as unregistered and unsupervised
- Market reaction: AMC shares rose 8.9% to $2.765; Robinhood stock fell 1.9% to $122.34
AMC's chief executive initiated a public confrontation with Robinhood on Thursday evening, asserting that the trading platform's newly issued stock tokens referencing AMC shares constitute unregistered securities in violation of U.S. law. Aron described the practice as "contemptible, outrageous, disgusting" and announced that AMC's securities counsel is evaluating whether the company can legally compel Robinhood to halt the trading.
Robinhood responded dismissively to Aron's concerns. The company's chief legal and compliance officer Dan Gallagher, who previously served as an SEC commissioner, rejected Aron's demand within hours. Gallagher stated that Robinhood understands securities law and declined to stop, challenging Aron to escalate through legal channels. CEO Vlad Tenev publicly backed the product in a follow-up statement.
The token's performance during the dispute revealed the dynamics of this emerging market. Within 18 hours of Aron's initial public complaint, the token's circulating supply expanded dramatically from approximately 158,000 units to 1.5 million. During an after-hours trading period, the tokenized version spiked to $18.04 before settling near the underlying stock price of $2.75 as the additional supply entered the market.
Robinhood's structure for these instruments places them outside traditional regulatory channels available to public companies. The tokens are issued through a Jersey-based entity that Robinhood itself describes as unregistered and unsupervised. They are sold exclusively to non-U.S. investors, and only a single authorized participant can mint new tokens, limiting AMC's ability to directly influence or halt the market. Aron's core complaint is that a functioning securities market referencing his company exists entirely beyond the company's control or involvement.
The dispute underscores a regulatory gap in how decentralized financial markets interact with traditional securities law. Neither AMC nor the SEC has filed formal complaints, and the market continues to operate according to Robinhood's interpretation that tokenized versions of stocks fall outside conventional securities registration requirements when structured and distributed in this manner.