Robinhood Faces Backlash Over Tokenized Equity Launch

Robinhood launched tokenized versions of over 200 U.S. stocks and ETFs, including private companies such as OpenAI and SpaceX, for its EU customers, initially causing a surge in its share price. OpenAI publicly disavowed the offering, warning that the 'OpenAI tokens' do not represent equity and were not authorized by the company. Robinhood clarified that the tokens offer indirect exposure through special purpose vehicles (SPVs) rather than direct ownership. Elon Musk, CEO of SpaceX and co-founder of OpenAI, criticized the tokens as 'fake equity.' Following OpenAI's warning, Robinhood's share price dropped from its record high. Despite the controversy, Robinhood claims that many private companies are interested in joining its broader initiative to tokenize real-world assets.