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Key Takeaways
- Kaplan says synthetic wrappers track a stock’s price without giving buyers ownership, so offshore trading never reaches the exchanges where the shares trade.
- The SEC’s Sept. 17 innovation exemption requires genuine ownership rights and notice to issuers before third-party tokenization, which Kaplan reads as excluding synthetic tokens.
- Kaplan’s firm, Promethum, builds DTC-linked tokenization infrastructure, giving him a direct commercial interest in the model he favors.
A public dispute between AMC Entertainment and Robinhood over tokenized AMC shares has reignited debate over how U.S. equities should move onto blockchains.
Aaron Kaplan, founder of tokenization infrastructure firm Promethum, argues in a column that the synthetic token model used in that dispute shortchanges American investors and companies compared with an alternative structure tied directly to shares held at the Depository Trust Company.
A Public Feud Over Consent and Ownership
AMC Chief Executive Adam Aron has said Robinhood tokenized AMC’s stock without the company’s consent, calling the product “vile.” Robinhood CEO Vlad Tenev has responded that consent was not required and that the company is meeting international demand for exposure to U.S. equities.
The disputed tokens are debt securities issued by a Robinhood offshore subsidiary. Kaplan describes them as part of a category the industry calls “wrappers,” products that track a stock’s price without giving the buyer ownership of the underlying shares.
The Case for Expanding Access, and Against the Current Model
Kaplan argues Tenev has identified a genuine opportunity: hundreds of millions of investors outside the U.S. cannot easily or affordably buy American equities directly, and expanding that access could direct a significant pool of new capital into American companies.
His objection is not to expanding access itself, but to a synthetic structure he argues lets intermediaries capture the trading activity, liquidity and fees that international demand generates, without that demand reaching the actual market for the underlying shares.
In Kaplan’s description, a synthetic wrapper touches U.S. capital markets only once, when the issuer buys shares to hold as collateral. After that, trading happens offshore between token holders, never reaching the exchanges where the company’s shares actually trade.
He argues that structure creates investor demand that does not translate into a genuine increase in a company’s market capitalization. This is a mismatch he says compounds across the nearly 200 U.S. companies he says have already been tokenized this way, within a tokenized-asset market Citi has projected could reach $2.7 trillion by 2030.
The SEC’s Rule Draws a Line Kaplan Supports
Kaplan points to the SEC’s Sept. 17 innovation exemption, which allows blockchain venues to list and trade tokenized securities, as excluding synthetic tokens from its scope. Under the exemption, qualifying tokens must represent genuine ownership, including dividend and voting rights equivalent to the underlying security. SEC Chairman Paul Atkins said in a speech:
“Qualifying tokens must provide holders with the same rights and privileges as the traditional securities.”
The exemption also requires that companies receive notice and an opportunity to object before a third party tokenizes their shares without the issuer’s involvement, a provision directly relevant to AMC’s objection to Robinhood’s product.
An Alternative Model Tied to Existing Securities Infrastructure
Kaplan argues the better model already exists at the center of U.S. market infrastructure: a token structured as a digital twin of a security custodied at the Depository Trust Company, the custodian for nearly all publicly traded U.S. shares.
Under a tokenization service the DTCC has said it plans to launch this year, the token and the underlying security would function as the same asset in two forms. The share would never leave the existing national clearing and settlement system.
Kaplan argues that structure means a foreign investor buying such a token is buying the actual share, with the purchase deepening the market U.S. investors also trade in, rather than routing demand into a separate offshore market.
An Argument From a Competitor in the Space
Kaplan’s company, Promethum, builds infrastructure for the kind of DTCC-linked digital-twin tokenization he argues for in the column, giving him a direct commercial interest in the model prevailing over synthetic wrappers.
His broader argument is that global investors will seek exposure to U.S. equities regardless of which structure wins out. He also argues that a model keeping tokenized trading connected to actual share ownership would strengthen American capital markets rather than diverting demand away from them.
