AMC Entertainment Holdings CEO Adam Aron has threatened legal action against Robinhood Markets after the brokerage began offering a tokenized version of AMC stock. Aron criticized the practice, stating he would have outside securities counsel investigate the offering.

Aron alleged that Robinhood uses an offshore operation, Robinhood Assets (Jersey) Limited, to market a "security sort of posing" as AMC without complying with U.S. securities laws. He claimed the practice creates a "fictitious synthetic equity market" that decouples ownership from a company's ability to control capital raising efforts. Aron also stated the "quasi-fake" token market creates distrust in financial markets and intends to question the U.S. Securities and Exchange Commission regarding the matter.

Robinhood CEO Vlad Tenev responded to the criticism by asking, "What's the concern?" Robinhood's chief legal officer Dan Gallagher stated the company will not cease offering the token and challenged Aron to proceed with legal counsel. A Robinhood spokesperson said:

"We stand firmly behind our Stock Tokens and their ability to provide international exposure to US equities, modernize the financial system and expand opportunities for ownership globally."

According to Robinhood's own disclosure, its stock tokens are not registered in the U.S. and cannot be offered or delivered to U.S. persons. Tokenized stocks are synthetic versions of a stock existing on a blockchain that track a company's price but do not offer traditional shareholder rights.