Asset Tokenization in the United States

Asset tokenization is a process in which rights to a real-world asset are recorded on a blockchain in the form of digital tokens. Such tokens do not create a new asset class but represent existing legal or economic rights, such as ownership, a fund share, or a claim on a debt obligation.

In the U.S., tokenization covers a wide range of assets:

• shares in real estate or investment funds (REITs, private real estate);
• claims on debt instruments (bonds, private loans, loan portfolios);
• shares in private equity (private equity, venture capital);
• economic interests in structured financial products;
• rights to income from intellectual property (royalties, license fees);
• rights to commodities, precious metals, and other physical assets held in custody by a licensed custodian.

In practice, real estate projects, tokenized funds, debt obligations, and structured products are most commonly tokenized.

The legal link between the token and the underlying asset is established through contracts, corporate structures, and accounting mechanisms that operate outside the blockchain.

Tokens allow for increased liquidity of traditionally illiquid assets, automated settlements, and simplified auditing, but are strictly regulated by law. The key point is that RWA tokens in the U.S. are almost always considered securities.

Case law applies the Howey Test, which determines whether a token constitutes an investment contract. A token may be deemed a security and fall under SEC regulation if the following conditions are met simultaneously:

1. Investment of money. This can be any form of capital, such as cash, checks, or current cryptocurrencies.
2. A common enterprise. This means that the investor’s return is tied to the success of the entire enterprise, not just the success of their individual investment.
3. A reasonable expectation of profit. This means that investors must have a reasonable expectation of profit, either through their own efforts or through the efforts of others.
4. Profit derived from the efforts of others. This means that investors must rely on the efforts of a promoter or a third party to generate a profit.

If a token meets these criteria, the issuer must either register the token with the SEC or utilize the exemptions provided by Reg D or Reg S, which govern marketing, investor access, and the secondary market.

Regulation S allows tokens to be offered outside the U.S. without SEC registration, provided that the requirements regarding the absence of a targeted offering within the U.S. are met.

To comply with Regulation S, it is necessary to:

• exclude marketing directed at U.S. investors;
• ensure control over the geographic location of investors;
• implement restrictions on the resale of tokens in the U.S. for a specified period: typically 1 year for equity instruments and 40 days for debt instruments, applicable to Category 3 offerings, which cover most tokenized RWAs.

In practice, this is achieved through the use of:

• KYC procedures with residency verification;
• geographic access restrictions;
• smart contracts with programmable rules for token transfers.

This structure allows companies to raise international capital while remaining compliant with U.S. law.

Many projects use a hybrid model in which:

• U.S. investors participate through Regulation D;
• international investors participate via Regulation S.

This allows companies to reach a global audience while complying with U.S. legal requirements. This model requires precise coordination of legal documents, investor verification procedures, and technical restrictions at the token level.

To comply with legal requirements, a set of legal documents is prepared, including:

• a legal opinion on the token’s status;
• a private placement memorandum;
• investor subscription agreements;
• risk disclosures and investor representations.

Form D, a notification to the SEC that the issuer is required to file no later than 15 calendar days after the first sale of tokens under Regulation D.

Such documentation confirms the legality of the structure, boosts investor confidence, and reduces the risk of claims from regulators.

The absence of an appropriate legal structure may lead to:

• the offering being deemed an illegal securities offering;
• fines and orders from the SEC;
• restrictions on secondary trading of tokens;
• a loss of trust among institutional investors.

Therefore, tokenization projects in the U.S. require the involvement of specialists with experience interacting with financial regulators and a track record of structuring private placements.

Gofaizen & Sherle advises clients on asset tokenization in more than 50 jurisdictions and supports projects at all stages, from initial assessment to post-issuance compliance. The firm specializes in structuring regulated products and engaging with regulatory authorities in the areas of digital assets and capital markets.

Gofaizen & Sherle’s services include:

• legal analysis and structuring of tokenized products;
• developing offering structures under Regulation D and Regulation S;
• preparation of legal documentation and support for investor outreach;
• advising on secondary trading and post-issuance compliance.

Our attorneys support projects at every stage—from evaluation and structuring to token launch and engagement with regulators.

Today, tokenization is viewed not as an experimental technology, but as a means of modernizing financial infrastructure. It enables the automation of accounting, settlement, and compliance processes while maintaining alignment with existing legal frameworks and investor protection mechanisms.

Companies planning to tokenize assets in the U.S. must consider not only technical but also legal aspects, as the legal framework determines whether tokens will be recognized as a legitimate investment instrument.