🥛 Robinhood gets a cease n’ desist 🎬

GM. This is Milk Road, the daily newsletter that's your extra set of eyes in crypto.

Here’s what we’ve got for you today:

✍️ AMC's CEO hit Robinhood w/ a cease n’ desist.
🎙️ The Milk Road Show: The Crypto Bull Market May Be Starting Earlier Than Anyone Expected.
🍪 OKX just launched an onchain operating system for AI agents.

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Prices as of 2:00 p.m. ET. Powered by CoinGecko.

AMC'S CEO HIT ROBINHOOD W/ A CEASE N’ DESIST 🎬

AMC's CEO Adam Aron spent yesterday publicly demanding that Robinhood kill its AMC tokenized stock.

Right now, AMC is worth about $2.6B, while its tokenized equivalent on Robinhood Chain is worth ~$2.8M (essentially a rounding error).

Yet Adam is calling his list of concerns "almost existential."

So what’s all the hubbub about? Let’s start with the mechanics…

Robinhood's stock tokens aren't actually shares in anything.

They're tokenized debt securities issued by Robinhood Assets (Jersey) Limited, an offshore affiliate parked on a small island off the coast of France.

Each one tracks the price of a stock - but that’s about it. It gives the holder no ownership in the underlying company, no voting rights, no dividends…

And as we mentioned up top, they’re (currently) tiny by comparison:

Sources: AMC market cap at Friday's premarket price, token value per onchain data.

They're also unregistered under U.S. securities law, which is why they can't be sold to U.S., Canadian, U.K. or Swiss residents.

And that comes straight from Robinhood's own website, which is exactly where Aron got his ammunition.

His first argument is about the cost. AMC spends millions every year complying with those investor-protection rules, while Robinhood issues its version ~3,000 miles offshore and skirts that same compliance requirement.

But compliance isn't the part keeping him up at night...

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AMC'S CEO HIT ROBINHOOD W/ A CEASE N’ DESIST (P2) 🎬

Issuing new stock is how AMC has been patching up its balance sheet for a while now.

Adam says synthetic AMC stock tokens floating around in wallets nobody can see make that job harder to pull off, calling the whole setup a "quasi-fake market" that seeds public distrust of financial markets.

He asked Robinhood to voluntarily cease and desist, said his "high-priced securities counsel" has been asked whether they can force it, and said he'll be taking it to the SEC.

(Though no letter has actually been filed… yet.)

Vlad Tenev's entire reply: "What's the concern?"

He made the longer version of his case last year, when OpenAI disowned its own Robinhood token. Vlad's position is that these are derivatives rather than equity, and that tokenizing a company shouldn't require that company's permission.

But there's a reason these kinds of critiques keep landing on Robinhood in particular...

Two versions of tokenized stocks are being built at the same time.

Kyle (our Head of Research) wrote this up for PRO members last week. Kraken and Robinhood got there first with wrappers, while Coinbase launched the actual asset on Base with full rights for whoever holds it.

Aron is attacking the wrapper model specifically - which are faster/easier to launch compared to legit onchain equities, and contributing to the massive growth of stock-based RWAs.

(E.g. Robinhood added 100 wrapped stock tokens in a single batch on August 13, while Coinbase has launched a total of 4 legit tokenized stocks to date.)

Source: The Block

So where does this all shake out?

In short: We’re in limbo right now.

The SEC may or may not pick this up, and Robinhood may or may not bow to AMC’s cease-and-desist.

Either way, public pressure like this will likely push future players toward taking the Coinbase route (legit 1:1 issuance) over the quick-n-easy wrapper route.

Kyle is well positioned for that outcome - he called Coinbase at $35 back in 2023, his first-ever PRO call.

It ran to $450, and today it sits near $190.

Don’t miss his next big call! Try Milk Road PRO for a buck for 7 days.