AMC Entertainment (NYSE:AMC) CEO Adam Aron on Friday threatened legal action against Robinhood (NASDAQ:HOOD), calling its offshore AMC stock token setup “shocking and shameful.”

AMC Threatens Legal Action Over Robinhood Stock Tokens

Aron posted on X in response to Robinhood CEO Vlad Tenev asking “what’s the concern?” after Aron’s initial criticism Thursday. 

He laid out several objections, starting with the offshore structure.

Robinhood issues its stock tokens through a Jersey-based subsidiary, an island 3,000 miles from the US, allowing it to sidestep the U.S. securities laws that AMC spends millions annually to comply with.

When investors buy the synthetic tokens, that buying pressure does not flow into actual AMC shares, potentially separating token demand from company demand entirely. 

The tokens also carry no voting rights and do not appear on AMC’s shareholder register, meaning buyers own a price-tracking product rather than a real stake in the company.

“This quasi-fake market you are creating on the island of Jersey sows distrust amongst the public about financial markets in general,” Aron wrote, calling on Robinhood to cease and desist and confirming AMC plans to raise the issue directly with the SEC.

Industry Executives Challenge the Tokens’ Claim to Stock Ownership

According to CoinDesk, the dispute is drawing a clear line between two very different products that often share the same name. 

Backpack exchange CEO Armani Ferrante backed Aron’s capital formation argument, noting that buying a synthetic token does not create the same buying pressure on the underlying stock. 

Archax CEO Graham Rodford put the standard plainly: “A tokenized stock should mean the stock, tokenized.” 

Meanwhile, Fairmint CEO Joris Delanoue added that if the holder is not on AMC’s official ownership record, the token is simply not an AMC share.

Moreover, Securitize CEO Carlos Domingo flagged a live example of what happens when these distinctions get ignored, pointing to one AMC-linked trading pair on Robinhood Chain that printed at roughly 60 times AMC’s actual share price due to thin liquidity and limited arbitrage. 

With the tokenized stock market already at $3.6 billion and Citi (NYSE:C) projecting $5.5 trillion in tokenized assets by 2030, the question of what investors actually own is becoming impossible to ignore.

Price Action: HOOD trades around $124 after breaking out of a double cup-and-handle formation, with $121 as the key support level to hold and no defined resistance above current price.

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