SEC's Stock Token Volume Caps Could Block Robinhood's Plans, Crypto Chief Says

Robinhood crypto chief flags SEC exemption limits

Robinhood is working through the SEC's latest rules on tokenized stocks, and the company's crypto chief says those rules may create a problem. Johann Kerbrat, Robinhood's senior vice president of crypto and international, told The Block that the exchange's existing stock token volume is already high enough to run into the caps set by the SEC's innovation exemption.

The SEC issued a five-year exemption on September 17 that allows certain U.S. venues to trade tokenized versions of listed stocks without registering as full exchanges. The order includes limits on which assets can be tokenized and how much trading volume is allowed.

Key numbers and details

• The SEC granted a five-year exemption on September 17 for tokenized U.S. stocks
• Robinhood's stock tokens are available in over 120 countries but not to U.S. users
• The tokens are issued as debt securities by a Jersey-based entity
• Robinhood is bringing crypto perpetual futures (leveraged trades that expire indefinitely) to the U.S. for eight coins: BTC, ETH, SOL, XRP, DOGE, ADA, LINK, and HYPE
• Initial leverage is set at 10x for Bitcoin and Ethereum, and 3x for the other six tokens

What Kerbrat said about the SEC order

Kerbrat described the SEC order as a long document with limits on both volume and which types of assets can be tokenized. "We're still trying to understand all the parameters of it," he said. "There are limitations on the volume, and what type of assets we can tokenize. If you look at our volume on our stock tokens, it's already pretty high and will hit some of its limits."

He added that the exemption signals the SEC "wants to work toward tokenization and understand the advantage of it," and that Robinhood plans to continue pushing for broader adoption of stock tokens and more U.S. stocks and ETFs (exchange-traded funds, investment products that trade on exchanges like stocks).

Stock tokens and the AMC dispute

Robinhood plans to add in-kind redemption and voting rights to its stock tokens. Kerbrat said these features were planned before a public dispute with AMC Entertainment CEO Adam Aron, and that in-kind redemption was discussed at a July event in London. AMC's CEO had criticized Robinhood's stock tokens as illegal offerings and said the company had not consented to them. Kerbrat called the criticism "mostly a marketing stunt" and said Robinhood stands behind the legal structure of its systems.

U.S. perpetual futures rollout

Alongside the stock token discussion, Kerbrat confirmed that Robinhood is launching crypto perpetual futures trading onshore. He highlighted that Robinhood uses a "waterfall clearing system" and recalculates funding rates constantly, unlike some competitors that recalculate every 15 minutes.

When asked about higher leverage limits in the U.S., Kerbrat said that was "TBD," depending on how users trade and how liquidity develops. He declined to outline a 2027 U.S. derivatives list but noted that commodity and ETF perpetuals have drawn interest in Europe. He said Robinhood has no plans to announce single-stock perpetuals, pointing instead to the firm's existing options business as the place where customers build multi-leg strategies.

Why this matters for tokenized stocks

The SEC's innovation exemption represents a significant regulatory step for tokenized stocks in the U.S., but the volume caps it imposes could constrain platforms like Robinhood that already see strong demand for stock tokens internationally. How the SEC and platforms resolve the tension between limiting volume and enabling innovation will shape whether tokenized U.S. equities become widely available on American exchanges.

What is still unclear

• Exactly what volume limits the SEC order will impose and how they will affect Robinhood's plans
• Whether Robinhood will adjust its stock token strategy to comply with the caps
• If and when leverage limits on U.S. perpetual futures will increase
• How the SEC's requirements for issuer notification and potential objections will play out in practice

Source

• The Block