AMC CEO Adam Aron is fighting back against Robinhood’s latest move. He says the brokerage launched a synthetic version of AMC stock without his company’s permission, and he called the product “vile.” The dispute is the latest clash in a years-long battle between the theater chain and the brokerage that made it a meme-stock sensation.
The fight centers on a new kind of financial instrument. Robinhood’s version of AMC stock is not a real share at all. It is a debt security issued by a Robinhood offshore subsidiary, which Aron calls a “fictitious synthetic equity market.” Holders of these tokens track the price of AMC stock but own none of the actual underlying shares.
Robinhood’s chief executive, Vlad Tenev, pushed back. He argued that consent is not required and that Robinhood is simply meeting international demand for U.S. equity exposure. The disagreement is now public, and it raises a broader question: are synthetic tokenized stocks good for American investors?
Aaron Kaplan’s Case Against Tokenization
Aaron Kaplan, founder of Promethum, has been warning about synthetic tokenization. In a recent post, he argued that U.S. markets are the envy of the world because investors trust that whoever owns a share owns it fully.
Kaplan sees a danger in letting other firms stand between international investors and U.S. companies. He believes the demand for these products is misdirected, not real. His argument rests on the idea that tokenized shares are not the same as owning the underlying stock.
The difference matters legally and financially. A holder of a real AMC share owns a piece of the company. A holder of a synthetic token holds a promise to pay based on the stock’s price, but no actual stake in the business.
How the Tokens Work
Synthetic tokenized stocks are debt securities issued by a third party, often an offshore subsidiary of the firm selling the token. They track a stock’s price but give buyers no ownership of the underlying shares. The industry calls these products “wrappers.”
In Robinhood’s case, the token is tied to AMC’s stock price. Buyers can trade it, but they get none of the benefits of real share ownership. That includes voting rights, dividend payments and the ability to sell the shares directly.
The distinction is not trivial. A real share is a legal claim on a company’s assets and earnings. A synthetic token is a financial contract whose value depends on the stock’s price.
The SEC’s Innovation Exemption
The Securities and Exchange Commission has weighed in on this fight. On September 17, the agency announced an innovation exemption that excludes synthetic tokens outright. The exemption applies to new types of digital securities that meet certain criteria.
Chairman Paul Atkins made the requirements clear. Qualifying tokens “must provide holders with the same rights and privileges as the traditional securities,” including dividends and voting. The exemption also requires companies get notice and the right to object before a third party tokenizes their shares.
The exemption addresses AMC’s concerns directly. It gives companies a say over whether their shares are turned into synthetic tokens.
The Industry’s Numbers
The numbers behind synthetic tokenization are large. Citi projects the synthetic token market at $2.7 trillion by 2030. That forecast reflects growing demand from international investors who want access to U.S. equities.
The United States has a population of roughly 340 million people. The number of individual investors living outside of the U.S. is at least that number. Many of those investors want to buy American stocks, and synthetic tokens offer them a way to do it without holding real shares.
Nearly 200 U.S. companies are already tokenized this way. The market is expanding quickly, and the projections suggest it will keep growing.
DTCC’s Digital Twin Approach
One major player is betting on a different model. DTCC, the Depository Trust Company, plans to launch a tokenization service this year. Under its approach, a token is a digital twin of a security custodied at the Depository Trust Company.
The key feature of DTCC’s model is that the token and the traditional security are one asset in two forms. The share never leaves the national clearing and settlement system. That means the ownership record stays intact, and the holder of the token still holds the underlying share.
This approach preserves the trust that Kaplan says makes U.S. markets attractive. Holders know exactly what they own and who owns it. The token is a digital representation, not a separate asset.
Why the Fight Matters
The dispute between Aron and Tenev is personal, but it is also symbolic. Robinhood made AMC a meme stock five years ago, and the CEOs are now at war over tokenized AMC stock. Aron’s reaction to the product is strong.
The broader stakes are about trust. If synthetic tokens become common, investors may lose faith that ownership means what it says. That could hurt the U.S. market’s reputation globally.
Kaplan’s argument is that the issuer-led model preserves trust and real ownership. Firms like Robinhood, he argues, insert themselves between international investors and U.S. markets to capture trading activity and fees. That is a fair reading of the situation.
What Happens Next
The SEC’s innovation exemption is the law now. Companies that want to object to tokenization of their shares have a clear path to do so. The exemption requires notice and objection rights, which gives AMC and others a chance to push back.
The DTCC model offers an alternative to the synthetic wrapper approach. It keeps the share in the national clearing and settlement system, preserving the trust that Kaplan values. That model is worth watching as the market develops.
The Citi projection of $2.7 trillion by 2030 suggests the appetite is real. International investors want access to U.S. stocks, and synthetic tokens offer them a way to do it without holding real shares. Whether they get synthetic tokens or digital twins of real shares may determine how the market evolves.
The fight between Aron and Tenev is likely to continue. Aron has called the product “vile,” and Tenev has pushed back. The SEC’s exemption gives companies a tool to object, but it does not stop the market from moving forward.
Key Figures
- $2.7 trillion: Citi’s projected synthetic token market by 2030
- 340 million: Population of the United States
- At least 340 million: Number of individual investors living outside the U.S.
- Nearly 200: U.S. companies already tokenized this way
Timeline of the Dispute
| Date | Event |
|---|---|
| Five years ago | Robinhood and AMC were the faces of the meme-stock era |
| Now | Robinhood tokenized AMC’s stock without consent |
| September 17 | SEC announces innovation exemption, excluding synthetic tokens outright |
What the Two Sides Want
- Aron: Consent for tokenization of AMC stock
- Tenev: No consent needed, international demand drives the product
- Kaplan: Trust preserved through real ownership
The DTCC model shows there is another way to tokenize shares. Instead of creating a separate offshore market, the token and the underlying security remain linked. The holder of the token holds the share, and the trade appears in the national clearing system.
That is the model worth watching. The SEC’s exemption is the law now, and companies have a path to object. Whether the market moves toward synthetic wrappers or digital twins of real shares may determine how the market evolves.
Where the paper stands
The paper backs AMC CEO Adam Aron against Robinhood’s synthetic AMC stock, a debt security that Aron calls a “fictitious synthetic equity market,” and is against any rulebook that would treat such instruments as ordinary stock while protecting the big brokerage from the consequences. The SEC’s innovation exemption, which excludes synthetic tokens outright, gives companies like AMC a path to object when a third party tokenizes their shares, and the paper supports that path.
The fight is about who controls the meaning of stock ownership. A real share is a legal claim on a company’s assets and earnings. A synthetic token is a financial contract whose value depends on the stock’s price. The paper agrees with Aaron Kaplan’s warning that tokenized shares are not the same as owning the underlying stock, and that letting other firms stand between international investors and U.S. companies is a danger.
The paper wants the market to evolve around models like DTCC’s digital twin approach, where a token is a digital representation of a security that stays within the national clearing and settlement system. That model preserves the trust Kaplan says makes U.S. markets attractive, keeping the share record intact and the holder’s rights clear. The reader should watch for rulebooks that favor the biggest firms rather than the small investor, and for signs that the SEC’s exemption holds up against pressure to water it down.
Source material: “Synthetic tokenized stocks are bad for American investors,” CoinDesk.
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