Robinhood’s stock tokens trigger EU probe after OpenAI denial: report

Regulatory concerns have emerged over the investment platform and its newly launched investment products. 

Robinhood’s new stock token product is facing scrutiny in the European Union, according to a Monday report from CNBC. The Bank of Lithuania, which serves as Robinhood’s main financial regulator in the region, has launched an investigation into the offering.

The tokens, unveiled on July 30, let investors buy exposure to private companies like SpaceX and OpenAI in the form of blockchain-based digital assets. As part of the rollout, Robinhood also announced a promotional giveaway, offering eligible EU users five euros’ worth of SpaceX and OpenAI tokens if they signed up before a certain deadline.

Lithuania’s central bank said it is seeking clarification on the nature of the offerings and how they’re being communicated to consumers. The probe comes shortly after OpenAI publicly rejected claims that the tokens represented actual equity, stating it had not partnered with Robinhood or authorized any transfer of its shares.

In response to the ChatGPT maker’s disclaimer, Robinhood clarified that the stock tokens are indeed not equity, but they offer retail investors exposure to the private assets.

While it is true that they aren’t technically “equity” (you can see the precise dynamics in our Terms for those interested), the tokens effectively give retail investors exposure to these private assets,” CEO Vlad Tenev explained.

The central bank, which previously granted Robinhood its brokerage and crypto asset service provider license, is now requesting more details on the product to determine whether the tokens meet legal and compliance standards.

“Only after receiving and evaluating this information will we be able to assess the legality and compliance of these specific instruments,” the bank reportedly stated. “The information for investors must be provided in clear, fair, and non-misleading language.”