'Send Your Lawyers': Robinhood Isn't Backing Down From AMC Over Stock Tokens

Robinhood has refused to halt trading of AMC Entertainment's stock tokens, with the company's chief legal counsel stating that AMC should pursue its legal threats. Dan Gallagher, Robinhood's chief legal, compliance, and corporate affairs officer, responded to AMC CEO Adam Aron's demand on X, challenging AMC to bring its legal issues to court.

Gallagher, a former SEC commissioner, emphasized that Robinhood is well-versed in U.S. securities laws and would not back down from these legal challenges. Aron accused Robinhood of marketing a security that falsely represents AMC stock without complying with U.S. securities laws. He also claimed that these tokens undermine shareholder rights and companies' control over capital raising.

AMC threatened to cease and desist the trading of AMC stock tokens if Robinhood does not comply. Tokenized stocks are blockchain-based assets that track or represent shares in publicly traded companies. Robinhood describes these tokens as debt securities issued by Robinhood Assets (Jersey) Limited, offering exposure to share prices without ownership of the underlying shares.

While potential legal angles for AMC include trademark misuse and false association claims, Robinhood could counter these by clearly distinguishing the products as tracking tokens without AMC's endorsement. AMC CEO has called Robinhood's stock tokens "contemptible" and "vile," with crypto lawyers suggesting that clear disclosures limiting AMC's options could resolve the dispute.