Counsel for putting real assets on-chain, whether funds, real estate, commodities, or instruments, structured so the token is a faithful, transferable claim on something real, with the securities, custody, and cross-border analysis built in from the first draft.
Tokenization is a title question before it is a technology question. A token representing a parcel of real estate or a fund interest is only as good as the document connecting it to the asset, and that document is drafted off-chain, usually the operating agreement of the vehicle holding it.
Whether the interest behind the token is a security under Article 8 of the Uniform Commercial Code is a drafting election: an LLC or partnership interest is not one unless the agreement says so, and the choice decides how a lender perfects against it and how a transfer settles. Resale is built in from the start. A token sold under Regulation D by an issuer that does not report to the SEC carries a one-year Rule 144 holding period, so the transfer logic has to count days.
We have advised on digital assets since 2014 and have represented clients in matters before the SEC and the CFTC. The failure we draft against is the custodian's insolvency, where ownership versus an unsecured claim turns on custody terms nobody read at onboarding. Abroad, we coordinate with locally admitted counsel.
Classification of the token against the securities, commodities, and money-transmission frameworks read together, determining if an interest is a security, what exemptions are available, and how the same instrument may implicate more than one regime at once.
Formation of the special-purpose vehicle that holds the underlying asset and issues the token, with governance, capitalization, and bankruptcy-remoteness designed so the holder's interest is documented and defensible at the legal level.
Custody and title arrangements that keep the on-chain record aligned with off-chain ownership, so the token is a faithful claim on the underlying real estate, fund interest, commodity, or instrument rather than a pointer to nothing.
Subscription, disclosure, and transfer documentation for the offering, drafted to match the chosen exemption or registration path and to make the rights, restrictions, and remedies of a token holder enforceable on paper as well as on-chain.
Investor-eligibility, accreditation, and resale controls, often built into the token itself so secondary transfers stay within the permitted set, paired with the anti-money-laundering and know-your-customer program a tokenized offering needs.
Reconciliation of the securities, tax, and AML regimes of the jurisdictions an offering will reach, with fallback custody and transfer mechanics so a holder's ownership is recoverable if an issuer, custodian, or platform fails, coordinated with locally admitted counsel where required.
Most tokenized assets are membership interests in an LLC that holds the property. If the operating agreement voids transfers to unapproved holders, a token moved to the wrong wallet moves nothing: the ledger shows a new owner the law does not recognize, and the two records have to be reconciled by hand.
An investment of money in a common enterprise with profits expected from the efforts of others is a security, and a tokenized fund share meets all four prongs by design. The exemption then sets the rules: Rule 506(c) permits general solicitation but requires the issuer to verify, not merely ask, that every buyer is accredited.
Restricted securities of a non-reporting issuer cannot be resold under Rule 144 for one year, and shares sold offshore under Regulation S carry their own distribution compliance period. A permissioned token standard that checks an allowlist and a date before every transfer enforces both; a plain ERC-20 enforces neither.
If the custodian holds the asset as bailee in a segregated account, it is the holder's property and stays out of the custodian's bankruptcy estate. If the terms grant the custodian title or the right to lend it out, the holder is an unsecured creditor the day the platform fails. The difference is a paragraph.
A token redeemable for gold is a spot commodity until it is sold to retail buyers on margin or on credit. Then, unless the metal is actually delivered within 28 days, the Commodity Exchange Act treats the sale as a futures contract under CFTC jurisdiction, and the IRS still taxes the gold as a collectible.
In the European Union a tokenized fund share is a financial instrument under MiFID II and sits outside MiCA, which excludes crypto-assets that qualify as financial instruments. In the Dubai International Financial Centre the same token is an Investment Token under the DFSA regime in force since 2021. Same code, three rulebooks.
Before anything is wrapped, the interest itself is put to the test as a security, a commodity interest, both, or neither, and that result picks the offering path of exemption, registration, or restructure. Everything downstream inherits this determination.
A special-purpose vehicle is formed to hold the deed, the fund interest, or the instrument, with custody and title papered so the on-chain ledger and the off-chain register cannot drift apart. Bankruptcy-remoteness is drafted here, while it is still cheap.
The token is issued with eligibility, accreditation, and resale logic compiled into the instrument itself, alongside subscription and disclosure documents matching the chosen exemption, AML and KYC screening at onboarding, and transfer controls that keep every resale inside the permitted set.
Once tokens circulate, the structure is maintained through secondary transfers, custodian changes, and jurisdiction creep, and the fallback mechanics are kept current, so if an issuer, custodian, or platform fails, the holder's ownership is recoverable off-chain.
The token is minted in a minute. The claim behind it has to outlive the platform.
Tokenization is the issuance of blockchain-based tokens that represent rights in an underlying asset, such as a share of a fund, an interest in real estate, a commodity, or a debt instrument. The token is the digital wrapper, and the legal force comes from how the underlying rights are held, transferred, and enforced. Done correctly, a token is a faithful, transferable claim on something real. Done loosely, it is a marketing label with no rights behind it.
Often, yes. A token that represents an investment interest with an expectation of profit from the efforts of others is likely a security, whatever technology is used to issue it. The analysis turns on the economic substance of the arrangement, and the same instrument can also implicate commodities and money-transmission rules. We analyze each structure against the securities, commodities, and tax frameworks together, and we have represented clients in matters before the SEC and the CFTC.
Through legal structure, and code alone cannot do it. Typically a special-purpose vehicle holds the underlying asset and the token represents an interest in that vehicle, with custody, title, and transfer documented so the on-chain record and the off-chain ownership stay aligned. The hard work is making the legal wrapper enforce what the token promises, so a holder's claim survives a dispute, an insolvency, or a change of custodian.
That depends on how the offering is structured and where the holder is located. Exemptions, accreditation rules, transfer restrictions, and AML and KYC obligations all govern who may acquire and resell a tokenized interest. Transfer logic is often built into the token itself so that resales stay within the permitted investor set, and the rules differ by jurisdiction, which is why eligibility is engineered into the structure from the start.
A sound structure is built so the holder's rights survive the platform. Because the underlying asset is held in a vehicle and the holder's interest is documented at the legal level, custody arrangements, bankruptcy-remoteness, and fallback transfer mechanics are set up front to keep ownership recoverable if an issuer, custodian, or technology provider fails. The token is a pointer, and the recoverable value lives in how the underlying rights are held.
Significantly. A token is reachable from anywhere, so an offering can touch the securities, tax, and AML regimes of every jurisdiction its holders sit in. What is a compliant private placement in one market can be an unregistered public offering in another. We work from Chicago, London, and Dubai and coordinate with locally admitted counsel where required, so the structure anticipates every jurisdiction the offering will reach.
Token classification, registration and exemption analysis, and securities-law compliance for digital-asset projects, with representation in matters before the SEC where enforcement is in play.
Explore →Securities-law analysis before launch, offering documentation, smart-contract review, and post-offering governance, for token sales structured for exemption or registration.
Explore →Regulated futures and derivatives under CFTC oversight, covering compliance, clearing and margin obligations, and frameworks for institutional participants in digital-asset markets.
Explore →Anti-money-laundering and know-your-customer programs for digital-asset businesses, with risk frameworks, onboarding controls, and documentation that withstands a regulator's review.
Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice
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