Tokenization Lawyers for the Securitize Platform
Our Lawyers Assist Clients with Listing Tokenized Assets on the Securitize Platform
Cryptocurrency ATM Investigation & CPA
Team Lead
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Cryptocurrency ATM Investigation
Team Lead
Oberheiden P.C. is a federal securities law firm that assists clients nationwide with the tokenization process. We assist clients with all aspects of federal compliance with respect to security tokens, equity tokens, fund tokens, utility tokens, and other digital tokens and tokenization projects—and our legal team provides representation throughout the tokenization process with Securitize, Inc. (“Securitize”).
While Securitize assists companies with many aspects of tokenization, it is not involved in the legal profession, and therefore it cannot provide legal advice. Our lawyers have a deep understanding of the unique legal and regulatory issues involved in tokenization, and we have extensive experience advising clients in this area. We advise clients regarding smart contracts, decentralized finance (DeFi), venture capital, protecting IP rights and sensitive data, and other related matters as well, and we can provide comprehensive and custom-tailored legal solutions based on your company’s specific needs.
Comprehensive Legal Services for Companies Pursuing Real World and Digital Asset Tokenization with Securitize, Inc.
As a general rule, all securities offered in the United States must be either: (i) registered with the U.S. Securities and Exchange Commission (SEC); or, (ii) subject to a registration exemption. When tokenizing real world and digital assets through the Securitize platform, companies will rely on registration exemptions in most cases.
Tokenization of Real Estate and Other Real World Assets (RWAs)
We assist with securities law compliance aspects of tokenizing real estate and other real world assets (RWAs) through Securitize. Our lawyers advise clients regarding the legal requirements for issuing blockchain-based tokens for RWA, as well as the legal issues involved in engaging broker-dealers and other related matters.
Tokenization of Digital Assets
We also assist clients with the tokenization of digital assets. Our lawyers understand the unique legal and technological issues involved in digital asset tokenization; and, here too, we take a comprehensive and custom-tailored approach to ensuring that our clients are prepared to meet all applicable legal requirements.
What We Can Do to Help
From real estate to artificial intelligence, we work with clients in all industries. Depending on your company’s specific needs, we can provide legal advice and representation for relevant matters including (but not limited to):
Determining Applicable Securities Exemptions
Companies seeking to tokenize assets or develop other new financial products to be offered to investors must establish their eligibility for a federal securities registration exemption (unless they plan to register with the SEC). Our lawyers assist clients with determining applicable securities exemptions (i.e., Reg D 506(b), 506(c), Reg A+, and Reg S), and then we guide our clients through the process of meeting the relevant exemption’s specific statutory and regulatory requirements.
Drafting Offering Documents
Our lawyers can draft all necessary offering documents based on the specific type of issuance you decide to pursue. This includes private placement memoranda (PPMs), subscription agreements, and operating agreements, among others. When drafting offering documents, transparency is key, as omitting or misrepresenting material information about liquidity, value, or other key metrics can lead to significant liability exposure in the future.
Structuring Special Purpose Vehicles (SPVs) and Other Legal Entities
We also assist our clients with structuring special purpose vehicles (SPVs) and other legal entities needed for tokenization and related securities transactions. This can be a critical component of both compliance and broader risk management—so it is critical that companies pursuing tokenization give this the time and attention it deserves.
Advising on Regulatory Compliance with Investor Qualification Rules
When conducting private placements and other unregistered securities offerings, companies must strictly comply with all applicable investor qualification rules. In many cases, this includes the rules that limit companies to soliciting investments from accredited investors. From due diligence to documentation, here too, we assist with all aspects of the process that are necessary for compliance and risk management.
Advising on Regulatory Compliance Issues Handled By Securitize
While Securitize handles certain aspects of regulatory compliance for companies using its tokenization platform, a business that uses Securitize remains directly responsible for federal securities law compliance. With this in mind, our lawyers also advise clients on the regulatory issues handled by Securitize so that they know what is (and isn’t) required and so that they can feel confident that they are making informed decisions as they move forward.
Meeting Reporting Obligations
Since a token represents an investment in a security, companies that issue tokens may have ongoing reporting obligations to the SEC. If your company has ongoing reporting obligations based on the nature of its tokenized issuance, our lawyers can assist with drafting and submitting all reports required by law.
Since tokenization is still relatively new in the investment world, it is not unusual for companies to encounter regulatory issues during (or after) the tokenization process. We provide our clients with the documentation they need to address these issues when they arise, and our lawyers also have extensive experience communicating with the SEC and other federal authorities on behalf of our clients.
Intellectual Property Protection
If desired, our law firm can also assist with protecting your company’s intellectual property (IP) and sensitive information. We provide comprehensive portfolio management services, from registration and monitoring to enforcement when necessary.
Dispute Resolution
We provide dispute resolution services when necessary as well. Disputes involving financial assets typically involve significant amounts at issue; and, as a result, both parties will have a vested interest in securing a favorable resolution. From tokenization-specific disputes to IP licensing and ownership disputes, our lawyers have the experience required to provide representation and support for all types of complex disputes. We also provide representation for SEC enforcement matters when necessary.
Put our highly experienced team on your side
Dr. Nick Oberheiden
Founder
Attorney-at-Law
Lynette S. Byrd
Former DOJ Trial Attorney
Partner
Brian J. Kuester
Former U.S. Attorney
Hon. Kevin McCarthy
55th Speaker, U.S. House of Representatives (ret.)
Government Consultant
Mike Pompeo
Of Counsel
Former U.S. Secretary of State
John W. Sellers
Former Senior DOJ Trial Attorney
Linda Julin McNamara
Federal Appeals Attorney
Nicholas B. Johnson
Former Prosecutor
Roger Bach
Former Special Agent (DOJ)
Chris J. Quick
Former Special Agent (FBI & IRS-CI)
Michael S. Koslow
Former Supervisory Special Agent (DOD-OIG)
Ray Yuen
Former Supervisory Special Agent (FBI)
An Overview of the Process
For companies preparing to tokenize through the Securitize platform, the process for moving forward is as follows:
1. Engage Securities Counsel
Companies should generally engage securities counsel before engaging with Securitize. When you choose Oberheiden P.C., our team of tokenization lawyers will assist with choosing an appropriate registration exemption, structuring your company’s tokenization to comply with the relevant federal laws and regulations, forming the appropriate entities, and taking any other legal steps necessary to secure the benefits of tokenization.
2. Engage with Securitize, Inc.
With a legally sound framework in place, companies can then engage with Securitize. With the documentation our lawyers have provided to you, you should be able to correctly set up your company’s smart contracts and take all of the other necessary technological steps to execute a tokenized offering. With that said, you will continue to have access to our lawyers throughout the process, and we will be able to assist as necessary.
3. Assess Compliance and Move Forward
Before conducting a tokenized issuance, the final step is to assess compliance based on Securitize’s custom-tailored offering. Our lawyers can assist here as well; and, if everything looks good, you can then move forward with your company’s tokenization through the Securitize platform.
FAQs: Understanding the Securities Law Implications of Tokenization
Which federal agencies have oversight of tokenization?
The U.S. Securities and Exchange Commission (SEC) has primary oversight of tokenized offerings. However, other federal agencies—including the Internal Revenue Service (IRS), U.S. Commodity Futures Trading Commission (CFTC), and U.S. Department of Justice (DOJ)—may have oversight as well.
Do I need to engage a law firm for an initial coin offering (ICO) through Securitize?
Securitize cannot provide legal advice, so companies will generally need to engage a law firm to assist with conducting initial coin offerings (ICOs) through its platform. Tokenized offerings are subject to extensive compliance obligations—and can pose significant legal risks—so working with experienced legal counsel is essential.
Can I use artificial intelligence to help with tokenization through the Securitize platform?
Using artificial intelligence is not a substitute for engaging legal counsel. Again, due to the significant legal risks involved in conducting tokenized offerings, we strongly recommend that all companies engage legal counsel with specific experience in this area.
What are the risks of conducting a noncompliant token issuance?
The risks of conducting a noncompliant token issuance include facing civil or criminal enforcement action by the SEC, CFTC, IRS, and DOJ, as well as facing civil litigation. Companies that conduct noncompliant offerings can face enormous liability exposure, and individual owners and executives can face fines and prison time in some cases.
Is Securitize responsible if there is an issue with my company’s token issuance?
Whether Securitize is responsible for an issue with your company’s token issuance depends on the nature of the issue and the terms of your company’s agreement with Securitize. With that said, reliance on a third-party service provider generally is not an excuse for violating federal securities laws or regulations. As a result, regardless of whether your company has a claim against Securitize, it could still be at risk of facing civil or criminal enforcement action (as well as possible private civil litigation).
Contact the Tokenization Lawyers at Oberheiden P.C.
If you would like to speak with one of our tokenization lawyers, we invite you to get in touch. To schedule a complimentary initial consultation, please call 888-680-1745 or tell us how we can contact you online today.
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