Robinhood CEO Says SEC Should Revise Rules To Foster Tokenization
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Robinhood CEO Vlad Tenev has urged the Securities and Exchanges Commission (SEC) to make the necessary regulatory adjustments to make the tokenization of private company securities legal in the U.S.
In a Jan. 28 op-ed in the Washington Post, Tenev argued that the U.S. is falling behind in the coming investing revolution. This revolution involves leveraging crypto technology to tokenize private-company stock, enabling retail investors to invest in leading companies before they become too expensive.
Robinhood is an investment app with 11.8 million monthly users, which offers access to stocks and cryptocurrencies.
Tenev said that the U.S. risks losing this market to parts of the world that have already addressed the regulatory bottlenecks, such as the European Union (EU), Hong Kong, Singapore, and Abu Dhabi.
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According to Tenev, the current investment landscape is not inclusive as only a few wealthy market participants can invest in top companies at their earliest stages, while most individuals lack those opportunities. Due to this, the investment gap has worsened as fewer companies are going public while other rules have shut out small investors from the private market.
However, crypto tokenization solves this problem and establishes a more inclusive investing landscape.
“Tokenizing private-company stock would enable retail investors to invest in leading companies early in their life cycles, before they potentially go public at valuations of more than $100 billion,” Tenev said.
“This would also benefit the companies themselves, enabling them to draw additional capital by tapping into a global crypto retail market that is growing increasingly more sophisticated and investment-savvy, without sacrificing the private-company protections they are used to - such as employee vesting and stock holding requirements.”
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