AMC Token Dispute Sparks Industry War Over Stock Models
Tokenized Stock Models Clash in Public Debate
A dispute between AMC Entertainment CEO Adam Aron and Robinhood has turned into a wider argument among crypto companies about how stock tokens should work. The fight is not just about one stock. It is about which of three different designs should become the standard for tokenized equities.
Tokenized stocks are digital representations of real company shares on a blockchain. Blockchain is a shared digital ledger that records transactions across many computers. Currently, there is $2.91 billion in tokenized equities, held by about 2.67 million people.
Three Competing Designs
- Linked securities: These tokens are issued by a third party and give synthetic exposure to a stock. They do not give owners any rights in the actual company. Robinhood’s stock tokens fall into this category.
- Custodial tokens: These represent an indirect interest in the underlying security through a regulated broker-dealer. Dinari, Ondo, and xStocks use this model.
- Issuer-sponsored tokens: These put a company’s own registered shares on-chain, with the company or its transfer agent directly involved. Securitize and Superstate use this model.
The SEC’s Division of Corporation Finance mapped these three categories in a statement on January 28. The model chosen determines which securities laws apply and what a holder can claim if the issuer goes bankrupt.
Debate Over Investor Rights
Gabriel Otte, co-founder of Dinari, criticized Robinhood and Ondo. He said their tokens are “synthetic and indisputably worse for the end investor than even common stocks.” He argued that the problem is not tokenization itself, but marketing a debt instrument as an investment in the US stock market.
Hayden Adams, founder of Uniswap, defended the synthetic model. He said these tokens meet a user demand for programmability, the ability to trade at night or on weekends, and the ability to use stocks in decentralized finance, or DeFi, apps. He compared them to early stablecoins—tokens designed to hold a steady value—and said they are not the same as dollars but still provide useful functionality.
SEC Warning on Risk
The SEC staff warned that holders of linked securities may be exposed to risks from the third party issuing the token. This includes the risk of the issuer going bankrupt, a risk that holders of the actual underlying security would not face.
Issuer-Led Models Gain Ground
Securitize CEO Carlos Domingo sided with Aron, saying he would not want people creating offshore derivatives of stock that trade everywhere. Securitize tokenized its own shares on the NYSE under the ticker SECZ and put them on-chain immediately.
Superstate offers a similar program for companies already listed on public exchanges. It appoints itself as a digital transfer agent and issues the company’s registered shares directly onto Ethereum and Solana. Galaxy Digital and Forward Industries have shares on-chain through this program.
What Is Confirmed
- Robinhood’s stock tokens are debt securities issued by an unregulated Jersey entity and are only sold to non-US persons.
- Dinari is the only one of the three major models selling to US investors.
- Ondo added proxy voting to more than 250 tokenized stocks and ETFs in April, but this feature is not available in the US.
What Is Still Unclear
It is not yet clear which model will become the industry standard. The SEC has categorized the models but has not mandated a single approach. Investor protection varies significantly depending on which design is used.
Why This Matters
The choice of model affects what rights investors actually hold. Custodial and issuer-sponsored tokens offer closer ties to the real company, including potential dividends and voting rights. Linked securities offer more flexibility for trading and integration with crypto apps but carry counterparty risk and no direct claim on the underlying company.
