Robinhood’s Tenev says temporary US tokenization rules risk limiting investment

Robinhood CEO Vlad Tenev has warned that uncertainty over the durability of US tokenization rules could discourage investors from committing substantial assets to blockchain-based equity markets. A temporary exemption from the Securities and Exchange Commission is a positive development, he said, but not enough to establish long-term confidence.

Speaking during Robinhood’s third-quarter earnings call Tuesday, Tenev called for further rulemaking or legislation, according to Cointelegraph. He said conversations with customers suggested that uncertainty about what happens in five years could become an obstacle to putting “serious assets” onto the technology.

His comments distinguish between permission to launch a market and confidence that it can operate over a longer investment horizon. In Tenev’s assessment, customers considering substantial commitments need greater certainty about the rules that will govern their holdings beyond the temporary framework.

The SEC’s innovation exemption provides conditional relief for certain venues trading tokenized stocks and certain liquidity providers. In a September 17 statement explaining the measure, SEC Chairman Paul Atkins described it as an interim step toward a more durable regulatory framework, rather than a permanent settlement of the rules.

The relief does not remove the broader investor-protection framework. Atkins said federal securities laws prohibiting fraud and market manipulation continue to apply in full, while participating venues must restrict access to eligible participants and comply with specified conditions.

Those conditions also address what investors actually receive when buying a tokenized stock. According to Atkins’ statement, qualifying securities must provide the same rights and privileges as their traditional counterparts, including dividends and voting rights. Underlying issuers must also have an opportunity to object to their securities trading on a participating venue.

Tokenization generally involves representing an asset using distributed ledger technology, but the legal and economic arrangements can differ substantially. SEC staff explained in a January statement that tokenized securities may be issued by companies themselves or created through third parties, with different implications for ownership and investor rights.

That distinction matters because a token linked to a share does not necessarily confer the same rights as holding the share itself. The staff statement noted that some third-party structures provide an interest in securities held in custody, while others offer synthetic exposure. It also warned that investors may face additional risks associated with the third party, including bankruptcy.

The staff separately emphasized that changing a security’s format does not change the application of federal securities laws. Its statement was an explanation of staff views, however, not a binding rule or a new legal obligation—a distinction that underscores the different roles played by guidance, temporary exemptions and permanent regulation.

The next policy question is how the temporary trading framework develops into lasting rules. Atkins has invited public comment and said durable rulemaking must follow the interim measure. Tenev’s warning places the commercial stakes alongside that regulatory process: an opening for tokenized trading may not, on its own, persuade customers to make substantial long-term commitments.