OpenAI Denies Robinhood Crypto Offering as Fake Equity Robinhood’s share price surges 100%

OpenAI has publicly stated that Robinhood’s new crypto offering does not represent real equity in its company. The AI firm took to X to clarify that the “OpenAI tokens” are not OpenAI equity, emphasizing that it had no role in the rollout, no partnership with Robinhood, and does not endorse the tokenized shares. OpenAI further noted that any genuine transfer of its stock would require the company’s direct approval, which it did not grant, and urged investors to exercise caution.

Elon Musk, responding to OpenAI’s post on X, wrote, “Your ‘equity’ is fake,” adding fuel to the debate over the legitimacy of tokenized shares. Robinhood had unveiled the tokenized shares as part of a broader showcase of its digital asset plans in Cannes, France. The product launch, which included staking services and new blockchain infrastructure, helped lift Robinhood’s share price past the $100 mark, setting a fresh record.

In response to OpenAI’s warning, a Robinhood spokesperson explained that the tokens offer “indirect exposure to private markets” for retail clients. This access is facilitated by Robinhood’s ownership stake in a special purpose vehicle. Under the new scheme, eligible users in the European Union who register to trade these tokenized equities by July 7 receive €5 worth of OpenAI and SpaceX tokens. These digital assets fall under Europe’s more flexible investor rules and trade on Robinhood’s crypto platform.

Johann Kerbrat, senior vice president and general manager of crypto at Robinhood, stated that the aim was to expand access and bring more people into private markets through tokenization. The incident highlights a clash between crypto platforms trying to make investing easier and the companies whose names and shares they’re turning into tokens. Investors in the United States remain barred from buying these tokens due to stricter domestic regulations. To date, the U.S. Securities and Exchange Commission has not given the green light for such products.

The controversy underscores the need for greater clarity and regulation in the rapidly evolving world of tokenized assets, where the lines between traditional equity and digital tokens can become blurred. The situation with OpenAI and Robinhood serves as a cautionary tale for companies and investors alike, highlighting the importance of due diligence and regulatory compliance in the rapidly evolving world of digital finance.