Robinhood’s CEO Vlad Tenev has stated that the technical classification of the trading platform’s tokenized shares of OpenAI and SpaceX as non-equity is “not entirely relevant.”
This assertion follows a warning from OpenAI regarding the product, which aims to provide European Union users with access to various U.S. stocks, including those of private companies that are generally less liquid than their public counterparts.
OpenAI expressed concerns last week, clarifying that Robinhood’s stock tokens do not confer actual equity ownership in the company. In a statement posted on the social media platform X, OpenAI indicated that “any transfer of OpenAI equity requires our approval — we did not approve any transfer.”
According to Robinhood, its OpenAI stock tokens are backed by the firm’s ownership stake in a special purpose vehicle.
During an interview with Finance Newso’s “Squawk Box Europe,” Tenev acknowledged that the tokens are not legally considered equity, echoing his response to OpenAI’s previous concerns.
Tenev elaborated by stating that OpenAI’s intricate organizational structure allows institutional investors to gain exposure through various financial instruments, such as equity that could convert to a for-profit designation in the future.
Originally established as a non-profit, OpenAI now incorporates a for-profit entity that is owned by the non-profit arm.
“In and of itself, I don’t think it’s entirely relevant that it’s not technically an equity instrument,” Tenev commented. He emphasized the significance of providing retail investors the chance to gain exposure to such assets, particularly given the transformative potential of AI technologies.
On Monday, the Bank of Lithuania, which oversees Robinhood’s operations in the European Union, informed Finance Newso that it is “awaiting clarifications” regarding the structure of the stock tokens in light of OpenAI’s recent statement.
“Only after receiving and evaluating this information will we be able to assess the legality and compliance of these specific instruments,” said Bank of Lithuania spokesman Giedrius Šniukas, emphasizing the necessity for clear and non-misleading information for investors.
In response to the regulator’s comments, Tenev expressed Robinhood’s willingness to engage with regulators, noting, “Since this is a new thing, regulators are going to want to look at it.” He conveyed confidence in the robustness of their program, stating they expect rigorous scrutiny as a leading innovator in the financial technology sector.
