Regulator seeking clarification on Robinhood’s EU stock token launch

Robinhood is pushing up against regulatory boundaries with its newly launched “stock tokens” in the European Union market. The neo-broker claimed its stock tokens were compliant with the Markets in Financial Instruments Directive (MiFID II), but the Bank of Lithuania (BoL) — through which Robinhood passports its services and products across the EU — is seeking clarification on the tokensʼ structure.

Robinhood shares hit an all-time high after it rolled out the tokenised product, which CEO Vlad Tenev said offers European investors exposure to “hundreds of major US stocks” — including Apple, Nvidia and Amazon — in addition to multiple exchange-traded fund (ETF) tokens. Tenev was speaking at the ‘To Catch A Token’ launch event, in Cannes, France, on June 30.

On its website, Robinhood claimed: “Stock tokens are offered under MiFID II as derivatives. The underlying assets are held securely by a US-licensed institution.”

However, a spokesperson at BoL, Lithuaniaʼs central bank — which regulates Robinhood Europe, UAB — told Compliance Corylated : “We have contacted Robinhood and are awaiting clarifications regarding the structure of stock tokens.

“Only after receiving and evaluating this information will we be able to assess the legality and compliance of these specific instruments.”

Meanwhile, Robinhood’s stock tokens are now available round-the-clock, Monday to Friday on its EU application, with holders receiving dividend payments directly within the app.

The neo-broker also plans to expand the offering into a non-stop, anytime access feature in phase two, and to support self-custody in phase three, according to Tenev. It is looking to develop a technology to remove stock tokens from Robinhood, enabling investors to control their own keys to the stock wallets.

Robinhood vs OpenAI

Alongside the publicly available US stocks, Robinhood also launched “private stock tokens” on its EU application, allowing customers to access “shares of private companies” on its decentralised platform.

In particular, Robinhood gave out five euros-worth of OpenAI and SpaceX stock tokens to each investor at the launch event, before releasing them to other customers on July 7.

However, OpenAI warned on social media platform X: “We did not partner with Robinhood, were not involved in this, and do not endorse it. Any transfer of OpenAI equity requires our approval — we did not approve any transfer. Please be careful.”

On July 7, Robinhood explained in a statement: “[Robinhood] is indirectly holding OpenAI shares through a special purpose vehicle (SPV) on their tokenised stock platform.” This means investors of OpenAI tokens are investing in the “OpenAI stake” held through the tokenised stocks.

SpaceX did not immediately reply to our questions on SpaceX tokens.

24/7 trading is here

The product launches came after Robinhood expanded its regulated territory through its acquisition of Bitstamp, which was completed on June 2.

Tenev explained that, in phase two, Robinhood is looking to incorporate Bitstamp into the stock token system by linking it to the “tokenisation engine”. This will unlock round-the-clock trade execution, which is not currently possible on traditional finance (TradFi) systems, such as the New York Stock Exchange (NYSE). He claimed phase two is expected to become a reality within “a few months”.

Regulated territory

“Bitstamp holds over 50 active licences and registrations globally, and brings customers across the EU, UK, US and Asia to Robinhood,” the group said in a statement.

In April, Robinhood Europe, UAB was authorised as an A-category investment firm by the BoL, according to its customer agreement, which allows the neo-broker to provide brokerage services, including proprietary trading and order execution on behalf of clients.

It also officially secured a Markets in Crypto-Assets Regulation (MiCA) licence from BoL in May — enabling it to operate in 31 EU jurisdictions — and is opening a European crypto hub in Lithuania, as a subsidiary of US-based Robinhood Markets.

Tokenising Picasso

“You could tokenise a Picasso, the Washington Wizards, carbon credits or a favourite musician’s publishing rights. That’s where the investing revolution begins,” said Tenev in a recent article for the Washington Post.

At the June 30 event, Robinhood announced its plan to develop Robinhood Chain, described as a blockchain optimised for real estate, art and other “real-world assets”. Robinhood Chain will build on Arbitrum, which currently powers Robinhoodʼs stock tokens. The technology is designed to support the transition of the TradFi system into the future, said Tenev.