Robinhood CEO Rejects Elon Musk’s Fake Token Claim

The launch of Robinhood into tokenized equity in private companies, such as OpenAI and SpaceX, on June 30 has sparked widespread criticism of the company.

This step, intended to broaden the access of retail investors to previously closed markets, has faced the criticism of those with high-profile voices and the affected firms.

Elon Musk Labels SpaceX Tokens Scam

Elon Musk described the claimed SpaceX tokens as a scam, complete with “fake dialogue”, and its tweet urged its customers not to engage in the offering. The AI startup reiterated that the tokens do not reflect legal shares in OpenAI and there were concerns of phony investment products in circulation purporting to be made in its name.

Robinhood CEO Vlad Tenev, in turn, justified the platform’s actions, stating that the tokens are not technically equity yet still granting effective exposure to privately held companies, access to which retail investors would normally not have. The launch signaled bigger plans by the company in the tokenized finance arena, with Tenev saying “This is only the start.”

Investors seem to be optimistic regardless of the controversy. The Robinhood share (NASDAQ: HOOD) gained 7 percent on July 2 and closed at $97.80. YTD, the stock has surged by 150% and 328% in the last 12 months.

At the moment, the tokenized assets reside on the Arbitrum blockchain. In the near future, Robinhood is planning to launch Robinhood Layer 2 Blockchain that will allow continuous trading 24/7, self custody, and commission-free transactions.