Robinhood's stock tokens under investigation in EU for misrepresentation, scrutiny on private equity tokenization

Robinhood’s stock token offerings are being scrutinized in the EU after OpenAI warned investors that the tokens do not represent equity in the company. Lithuania’s central bank is investigating, awaiting clarifications from Robinhood. The backlash focuses on private equity tokens for non-public companies like OpenAI and SpaceX.

Galaxy Research recreated a slide outlining Robinhood’s tokenization framework. These equity tokens are essentially derivatives providing indirect exposure to the underlying asset. The tokenization market is valued at over $24 billion, with tokenization gaining traction in private credit markets. Stocks account for just $188 million of the market.

Major institutions like BlackRock and Franklin Templeton have entered the tokenization space. The market could see substantial growth in the coming years, with tokenized stocks alone potentially representing a trillion-dollar opportunity. At the recent Tokenize This conference, industry executives discussed the massive potential of tokenized stocks.

Read more at Cointelegraph: Robinhood’s OpenAI and SpaceX Tokens Under EU Investigation