Robinhood Tokenized Stocks Face Scrutiny From Lithuania Central Bank

Core Insights - Robinhood Markets, Inc. is under investigation by Lithuania's central bank regarding its newly launched tokenized equity products [1] - The scrutiny follows Robinhood's launch of its Stock Tokens product in the EU, which offers blockchain-based access to shares, including private firms [2] - Lithuania is now Robinhood's primary EU regulator after granting it a brokerage and crypto asset license [2] Regulatory Concerns - The Bank of Lithuania has requested clarifications from Robinhood about the structure of OpenAI and SpaceX stock tokens and related consumer communication [3] - Robinhood defends its tokenized products by stating they are backed by ownership interests for indirect exposure to private markets, but regulators are concerned about transparency and legality [3][7] - Robinhood's expansion into tokenized equities in the EU is expected to face a challenging compliance review, which may have broader regulatory implications [4] Historical Regulatory Issues - Robinhood has faced significant regulatory scrutiny, resulting in fines and restrictions, including a $26 million settlement with FINRA in March 2025 for failing to address misconduct red flags [5] - In January 2025, the company paid a $45 million fine for violating multiple securities law provisions, and in September 2024, it faced a $3.9 million penalty for crypto withdrawal failures [6] - Despite these challenges, Robinhood's shares have increased by 150.8%, significantly outperforming the industry's 21.1% growth this year [6]