Robinhood's on-chain stocks have been investigated

Author: C Labs Lao Wang, C Labs Crypto Observer

A few days ago, Robinhood just announced in Cannes, France, that EU users can trade tokenized versions of over 200 U.S. stocks and ETFs through its crypto app, including stock tokens of private companies like OpenAI and SpaceX. (See Overnight, on-chain stocks became popular!)

Robinhood stated during the event that EU users can receive OpenAI and SpaceX stock tokens worth 5 euros each by registering on the app and trading stock tokens (totaling 1.5 million euros, with 1 million for OpenAI and 500,000 for SpaceX).

However, just a few days later, according to CNBC, the Bank of Lithuania (Robinhood's registration location in the EU) has launched a preliminary investigation, requesting clarification on the token structure and user information disclosure, and stated that the bank is "assessing" whether these token products comply with financial regulations.

Before this, the involved OpenAI had already distanced itself from the situation.

OpenAI publicly stated that it has not collaborated with Robinhood, has not authorized or recognized these tokens, emphasizing that they "are not OpenAI equity," and warned investors to be cautious.

SpaceX has not publicly commented, but Elon Musk, who supports crypto, clearly favors stock representation, joking on the X platform that OpenAI's own equity is "fake." (In the early days, OpenAI was supported by Musk as a nonprofit organization, which he still holds a grudge about.)

In fact, this incident does not significantly impact the actual "on-chain stock" business.

The main point of contention is that OpenAI and SpaceX are private companies, and their stocks are undoubtedly unregistered securities.

Robinhood stated that these stock tokens of private companies represent the "economic rights" of these companies, rather than formal equity, and do not include voting rights; these tokens are not "securities," but a type of "new digital asset" aimed at providing users with access to private markets.

Everyone thought crypto projects were wilder, while brokerages were more compliant.

Unexpectedly, this time it was the brokerage Robinhood that stumbled first, as its key launched business was flagged by regulators.