Robinhood vs Do Kwon: SEC Clarifies on Stock Tokens
The SEC issued a framework for tokenized securities, contrasting Robinhood's regulated stock tokens with Do Kwon's fraudulent Mirror Protocol.Summary
The US SEC released a joint statement classifying tokenized securities into issuer-sponsored and third-party-sponsored types, the latter including custodial and synthetic models. This clarification followed the collapse of Do Kwon's Mirror Protocol, a large-scale experiment in synthetic tokenized securities built on Terra, which resulted in over $40 billion in investor losses due to Kwon's secret manipulation and eventual sentencing.
Robinhood currently offers stock tokens in Europe that fit the SEC's 'synthetic tokenized securities' definition, as they are derivative contracts without direct ownership of the underlying assets. However, Robinhood operates as a regulated entity, transparently disclosing product nature and complying with MiFID II, unlike Mirror Protocol, which evaded regulation under a guise of decentralization.
Robinhood CEO Vlad Tenev advocated for tokenization to enable real-time settlement, aiming to shift towards a custodial model allowing 24/7 trading and self-custody. Tenev praised the current SEC leadership and urged Congress to pass the CLARITY Act to solidify regulatory progress, highlighting that the Mirror Protocol failure underscores the danger of claiming 'decentralization' to bypass securities laws.
(Source：BeInCrypto)