Stock token market structure debate widens after SEC draws line on onchain U.S. equities

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Stock token market SEC debate

Highlights

SEC's Sept. 17 five-year exemption allows onchain tokenized U.S. equities trading only if issuer grants full rights, excluding synthetic or wrapped products like Robinhood’s AMC token.
Robinhood’s AMC token showed a median price gap of 0.87% versus AMC NYSE stock during market hours, spiking as high as $23.16 after hours despite no minting or burning of tokens.
SEC policy caps onchain trading to 0.25% of daily volume for large caps and 2.5% for other stocks, while wrapped tokens like Robinhood’s remain outside U.S. regulation, raising concerns about conversion risk and price gaps.

SEC framework sharpens token model divide

As argued by CoinDesk, the SEC has now drawn a regulatory distinction between issuer-sponsored stock tokens and wrapped products that merely reference underlying shares. Under the agency’s Sept. 17 five-year exemption, tokenized U.S. equities may trade onchain in the U.S. only if the token carries the same dividends, voting rights and class rights as the share, excluding synthetic exposure such as Robinhood’s AMC token.

The policy line follows a public clash between AMC Chief Executive Adam Aron and Robinhood Chief Executive Vlad Tenev over tokenized AMC shares. Aron describes the product as a "quasi-fake market" and threatens legal action, while Tenev argues that a listed company does not control every product built on its stock.

Trading data cited in the commentary shows Robinhood’s AMC token generally tracks AMC’s NYSE close while the underlying market is open, with a median gap of 0.87% across seven sessions between Aug. 31 and Sept. 9, and a widest gap of 2.71%. But when the stock market is closed, dislocations become more pronounced, including a move late on Sept. 3 when the token jumps from $2.55 to as high as $23.16 before falling back to $3.26 within the same hour.

The article says wrapped tokens are typically structured as claims against offshore issuers that hold the underlying shares as collateral. In theory, a 1:1 backing model should keep prices aligned, but in practice the token and the share trade as separate instruments, leaving arbitrageurs and market makers to close gaps when they can.

In Robinhood’s structure, the Jersey issuer lists only one authorized participant for creation and redemption. Onchain data cited in the piece shows no minting or burning during the sharp Sept. 3 price spike, with 47 mints occurring only on Sept. 4 during regular cash-session hours, suggesting the move was driven by trading within the token market rather than by transactions in AMC stock itself.

Liquidity limits expose wider market infrastructure gap

The commentary argues that the core problem is no longer who can issue a stock token, but how a continuous market is built around it. In the AMC case, price formation in the token reportedly becomes disconnected enough that demand for a memecoin quoted in tokenized AMC helps push the stock token higher, passing unrelated speculative signals into an instrument meant to reference a cinema chain’s equity.

To limit spillover into underlying equities, the SEC exemption caps onchain trading at 0.25% of average daily volume for large-cap stocks and 2.5% for other listed shares. Offshore wrapped tokens for non-U.S. holders, including Robinhood’s model, remain outside that jurisdiction, allowing them to continue operating under a different framework.

Wrapped tokens still offer clear distribution advantages, especially in markets where access to U.S. equities is costly or restricted. Robinhood’s stock tokens cover more than 190 companies across 120 countries, while xStocks and Ondo use similar structures, but that broader reach comes with counterparty risk, weaker investor rights and the possibility of price gaps when holders cannot easily convert claims into shares outside regular U.S. trading hours.

Issuer-sponsored tokens, by contrast, involve the issuer and transfer agent directly and make the token the security itself, including voting rights and corporate actions. The article argues that this reduces conversion and intermediary risk for market makers, although it does not solve thin liquidity by itself and currently remains limited in scale, with only a few names trading, including Bullish’s BLSH.

The piece concludes that neither model can solve the market structure problem alone. It says exchanges, brokers, fund managers, market makers, transfer agents and clearinghouses each control part of the required infrastructure, and industry efforts such as the IST Coalition are focused on bringing those participants together to narrow spreads, speed conversion and support continuous trading.

Our earlier coverage of the Federal Reserve’s proposed stablecoin rules explained how the GENIUS Act framework would be implemented through reserve, capital, and custody standards for Fed-supervised issuers and banks. We noted that the proposal also defines what stablecoin-related activities banks can conduct and opens a 60-day public comment period, signaling a push toward tighter, more explicit oversight of token-based financial instruments.

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