Trump Media and Technology Group, operator of US President Donald Trumpโs Truth Social platform, said Wednesday it plans to roll out a blockchain token for shareholders that entitles them to perks and rewards.
The DJT token will be launched in collaboration with crypto exchange Crypto.com, and the distribution to existing shareholders set at a 1:1 ratio, or one token per share owned, according to the announcement from the company.
The token โmayโ include rewards and perks for DJT shareholders, including discounts on the Truth Social media platform, the Truth+ media streaming platform, and prediction market Truth Predict.
However, the token is not a tokenized stock and does not entitle holders to shareholder rights or a claim on the companyโs future earnings, Trump Media confirmed to Cointelegraph.
The token showcases how blockchain technology can be paired with traditional asset classes to provide benefits to holders, but also highlights how tokenized equity products do not necessarily grant the same rights as ownership of the underlying asset.
Related: Tokenized stocks have โstablecoin momentโ as market cap hits $1.2B
Robinhood tokenizes private equity, but users do not have same rights as stockholders
In June, asset brokerage platform Robinhood announced the launch of tokenized stock trading for customers in the European Union.
Robinhood offered customers $5 in SpaceX and OpenAI โprivate equityโ tokens as part of the rollout.
However, OpenAI disavowed the tokens almost immediately, warning prospective holders that they did not represent a private equity stake in the company nor entitle holders to any shareholder rights.
โWe did not partner with Robinhood, we were not involved in this, and do not endorse it.ย Any transfer of OpenAI equity requires our approval. We did not approve any transfer,โ OpenAI said in response to the Robinhood announcement.
Attorneys and crypto industry executives told Cointelegraph that many tokenized equity products are meant to track the price of the underlying asset, but do not actually represent equity in a company or the contractual rights associated with traditional equity ownership.
โThere is no direct claim on company assets, no voting rights, and no access to internal financial information,โ according to John Murillo, chief business officer of fintech company B2BROKER.
Magazine: Will Robinhoodโs tokenized stocks REALLY take over the world? Pros and cons
