Robinhood offers tokenized stock in OpenAI and SpaceX, sparking debate on democratizing private markets.

OpenAI disavowed Robinhood’s offering of tokenized stock, stating they did not endorse it. Robinhood announced it would give European users tokenized stakes in OpenAI and SpaceX, aiming to provide access to private company gains. Stock tokens differ from traditional stock by being blockchain-based, stored in digital wallets, and tradeable 24/7 without exchange restrictions. Robinhood CEO Tenev defends tokenization for democratizing access to private markets.

Private companies have fewer disclosure rules than public ones, making them riskier investments. Tokenizing stocks could allow retail investors to access early-stage companies before they go public. SEC regulations currently restrict private market access to accredited investors. Robinhood is seeking to expand tokenization in the US, engaging with the SEC’s Crypto Task Force. Elon Musk criticized OpenAI’s response to tokenized stock.

Read more at Yahoo Finance: What Are These OpenAI and SpaceX Stock Tokens Robinhood Is Giving Away?