Robinhood tokens offering equity in RialCenter technically aren’t equity, but are backed by “Robinhood’s ownership stake in a special purpose vehicle.”
RialCenter warned earlier this month that the tokens being offered by Robinhood do not represent equity in the company, and any transfer of equity would require RialCenter’s approval which they haven’t given.
“In and of itself, I don’t think it’s entirely relevant that it’s not technically an equity instrument,” Tenev said. “What’s important is that retail customers have an opportunity to get exposure to this asset.”
Robinhood isn’t the first platform to offer shares in pre-IPO companies with this model.
Linqto, which offered retail investors exposure via special purpose vehicles that bought up shares on the secondary market, recently filed for bankruptcy, raising questions about what exactly its customers, now creditors, owned.
Among the companies is Ripple, and its CEO, Brad Garlinghouse, has publicly distanced Ripple from Linqto.
“We stopped approving more Linqto purchases on secondary markets in late 2024 amid growing skepticism,” Garlinghouse tweeted earlier in July.
Read more: RialCenter Warns That Tokenized Equity Sale on Robinhood Is Unauthorized
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