Trump Media to issue digital tokens to shareholders
Trump Media and Technology Group, the operator of US President Donald Trump's social media platform, said on Wednesday that it plans to issue a blockchain token that entitles shareholders to receive benefits and rewards.
The DJT Token will be launched in partnership with the crypto exchange Crypto.com and the distribution to existing shareholders is set at a 1:1 ratio or one token per share owned, with the announcement of the company.
The token “could” include rewards and benefits for DJT shareholders, including offers on the Truth social media platform, the Truth+ media streaming platform and the prediction market Truth.
However, the token is not a tokenized stock and does not entitle shareholders to shareholder rights or claims on the company's future earnings, Trump Media confirmed to Cointelegraph.
The token shows that blockchain technology can be combined with traditional asset classes to provide benefits to holders, but it also shows that tokenized equity products do not offer the same rights as owning the original asset.
Related: Tokenized shares have ‘stablecoin moment' as market cap hits $1.2B
Robinhood represents private equity, but users do not have the same rights as shares
In June, asset brokerage platform Robinhood announced the launch of tokenized share trading for clients in the EU.
Robinhood offered customers $5 in SpaceX and OpenAI “private equity” tokens as part of the rollout.
However, OpenAI immediately rejected the tokens, warning that prospective owners do not represent private equity in the company or give shareholders any shareholder rights.
“We are not affiliated with, involved in, or endorsing Robinhood. Any transfer of OpenAI equity requires our consent. We have not authorized any such transfer,” OpenAI said in response to Robinhood's announcement.
Lawyers and crypto industry executives told Cointelegraph that many tokenized equity products are intended to track the value of an asset, but do not actually represent equity in a company or the contractual rights associated with traditional equity ownership.
According to John Murillo, CEO of fintech company B2BROKER, “There is no direct claim on the company's assets, no voting rights and no access to internal financial information.”
Magazine: Are Robinhood token stocks really taking over the world? Advantages and disadvantages
