Robinhood's Tenev says US tokenization needs more than a temporary SEC exemption
In brief
- Tenev welcomed the SEC's innovation exemption but said rulemaking or legislation is still needed.
- Robinhood's roughly 200 stock tokens fall outside the exemption, lacking equivalent shareholder rights.
- Robinhood's Q3 crypto revenue fell 55% year-on-year to $120 million.
- Event-contract revenue rose sixfold to $173 million, according to Cointelegraph.
The exemption helps, but it's not enough
Tenev welcomed the SEC's innovation exemption on the call. He also said further rulemaking or legislation would be needed for longer-term regulatory certainty, Cointelegraph reported.
"I think the uncertainty of what happens in five years is likely to be an impediment to, like, putting serious assets onto this technology."
Tenev said Robinhood hopes to share more on its own US tokenization plans in the near future. He didn't give a date.
Robinhood's stock tokens sit outside the exemption
Robinhood offers around 200 stock tokens on Robinhood Chain. They're backed by underlying shares but structured as tokenized debt securities, so holders get economic exposure without the same shareholder rights as conventional stocks. That structure leaves them outside the SEC's innovation exemption, which requires equivalent rights (including dividends and voting rights).
Overseas, Tenev said Robinhood intends to launch private-company stock tokens, subject to regulatory arrangements. In the US, the company's working on a path that satisfies current accreditation constraints.
The wider push has drawn objections. Microsoft, Alphabet and Goldman Sachs were among 16 companies that objected to their shares being offered on a proposed OKX/ICE venue, per Cointelegraph's report, while AMC CEO Adam Aron separately criticized Robinhood's tokenized stock products. Binance Research's base-case forecast has the tokenized equities market growing to $349 billion by 2030, from $4.43 billion as of Sept. 15.
Crypto revenue fell 55% in Q3
Robinhood's crypto revenue fell 55% year-on-year to $120 million in the third quarter, according to results reported by Cointelegraph. Crypto notional trading volume dropped 38% to $50 billion (app volume fell 48% to $21 billion, and Bitstamp volume fell 28% to $29 billion).
Event contracts went the other way.
Event-contract revenue rose sixfold to $173 million, and contracts traded rose more than sevenfold to 16.4 billion. Total net revenue climbed 12% to a record $1.42 billion, which still came in below analyst expectations. Adjusted earnings per share were $0.60, missing estimates by 4 cents.
Frequently asked questions
Why are Robinhood's stock tokens outside the SEC's innovation exemption?
Robinhood's stock tokens are backed by underlying shares but structured as tokenized debt securities. Holders get economic exposure without the same shareholder rights as conventional stocks. The SEC's innovation exemption requires equivalent rights, including dividends and voting rights, so the current structure doesn't qualify.
What does Vlad Tenev say US tokenization still needs?
Tenev welcomed the SEC's innovation exemption but said further rulemaking or legislation would be needed for longer-term regulatory certainty. He said uncertainty about what happens in five years is likely to hold back serious assets from moving onto the technology.
