Robinhood’s latest product pitch — tokenized versions of private company stocks like OpenAI and SpaceX — is already drawing heat. While the trading app claims these tokens let retail users “get exposure” to pre-IPO giants, it turns out they do not represent any actual equity. According to Ripple CTO David Schwartz, if things go sideways, the legal safety net is essentially this: just sue us.
Last week, Vlad Tenev unveiled Robinhood’s new products, including an expanded crypto app, a Gold card rebranded for crypto perks and 24/7 tokenized trading of both public and private equities. Robinhood promises that dividends and stock splits for U.S. stocks like Apple and Nvidia will be reflected in the tokens.
However, for companies like OpenAI and SpaceX, there is a twist: these are not real shares but rather synthetic exposure wrapped in blockchain and built on Arbitrum, but with its own layer 2 in development.
What’s under the hood?
Schwartz, responding to rising confusion on X, explained that the tokens are designed to mirror the behavior of actual stocks — including splits, dividends and other events — but do not come with ownership, voting rights or any legal stake.
There is no real backing under the hood, only a promise from Robinhood to simulate the experience. If the company fails to follow through, users are left with legal action as their only recourse, provided the firm is still solvent when that time comes.
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Despite this setup, Robinhood says it has already been flooded with requests from other private companies that want to offer their shares in tokenized form. The model skips over traditional barriers like accredited investor status, giving retail users synthetic access to Silicon Valley heavyweights.
But without a public market price to anchor valuations, or clearly defined rules for dividend-like payouts, the tokens raise more questions than answers.
