Robinhood Plans to Launch Thousands of Private Companies as Tokenized Stocks

Vladimir Tenev, CEO and co-founder of the trading platform Robinhood, announced the company’s intention to list “thousands” of private companies as tokenized stocks. The statement follows controversy after Robinhood offered tokenized shares of private firms OpenAI and SpaceX.

The tokenized stocks are currently only available in the European Union and are based on an Ethereum layer-2 network. This model allows retail users to gain exposure to private company equity, which is typically unavailable to the public.

OpenAI publicly criticized the tokenized offering of its shares, stating it had not approved any capital transfer and was not involved in Robinhood’s initiative. Tenev clarified that these tokens were distributed as part of a giveaway and are not yet tradable.

Robinhood claims it either holds the underlying assets or works with traditional financial institutions to secure them. The CEO noted the offering complies with the EU’s clear regulations on crypto derivatives and that discussions with regulatory authorities are ongoing.

For now, Robinhood’s tokenized stocks are only accessible in the EU.