The legal and regulatory path for tokenization
The rules that apply to a token decide how the platform must work: who can invest, how tokens can move and which licences are needed. This guide explains the main frameworks in plain language.
This guide is general information, not legal advice. Coretos plans the regulatory path together with licensed counsel in each market.
Step one: what is the token, legally?
The same technology can create very different legal instruments. A token that gives a share of profits, interest or ownership in a company usually counts as a security (or a “financial instrument”). A token that is backed by a basket of assets or a currency and used for payments may be a stablecoin. Other tokens may fall under general crypto-asset rules. The classification decides everything that follows, so it is the first question to answer with counsel.
European Union
MiFID II (the Markets in Financial Instruments Directive). Tokens that qualify as financial instruments — for example tokenized shares, bonds or fund units — are regulated like their traditional equivalents. Firms that offer, advise on or trade them need the right investment-firm licences, and trading must happen on authorised venues.
The Prospectus Regulation. Public offers of securities generally need an approved prospectus, unless an exemption applies — for example offers only to qualified investors, to a limited number of people, or below national thresholds.
The DLT Pilot Regime. Since March 2023 the EU has allowed market infrastructures to trade and settle tokenized securities on distributed ledgers, under a special regime for DLT multilateral trading facilities and settlement systems.
MiCA (the Markets in Crypto-Assets Regulation). Fully applicable since the end of 2024, MiCA covers crypto-assets that are not financial instruments, including stablecoins (e-money tokens and asset-referenced tokens), and licenses crypto-asset service providers. Tokenized securities are outside MiCA and stay under securities law.
Funds. Tokenized investment funds also follow fund rules such as the Alternative Investment Fund Managers Directive (AIFMD) or the rules for undertakings for collective investment in transferable securities (UCITS).
Poland
The Polish Financial Supervision Authority (KNF, Komisja Nadzoru Finansowego) supervises securities offerings, investment firms and trading venues. Tokenized securities follow the Polish rules on public offerings and trading in financial instruments, including national thresholds for simplified offering documents. The national legislation implementing MiCA and naming the supervisor for crypto-asset services should be checked for its current status before launch.
United States
Tokenized securities are securities under US law. Most private tokenized offerings rely on exemptions from registration:
- Regulation D — private placements, typically to accredited investors.
- Regulation S — offers made only to investors outside the United States.
- Regulation A+ — smaller public offerings with a simplified qualification process.
- Regulation Crowdfunding — small raises through registered funding portals.
Secondary trading needs a registered broker-dealer or an alternative trading system (ATS), and a transfer agent often keeps the official register. Payment stablecoins now have a federal framework under the GENIUS Act of 2025.
Other hubs
- Switzerland — the DLT Act recognises ledger-based securities and created a licence for DLT trading facilities.
- United Kingdom — the Financial Conduct Authority and the Bank of England run the Digital Securities Sandbox for firms testing tokenized securities infrastructure.
- United Arab Emirates — the Virtual Assets Regulatory Authority (VARA) in Dubai and the Abu Dhabi Global Market (ADGM) regulate virtual and tokenized assets.
- Singapore — the Monetary Authority of Singapore (MAS) supports tokenization pilots through Project Guardian.
How the rules shape the platform
| Legal requirement | What the platform must do |
|---|---|
| Only eligible investors | Identity checks, investor classification and wallet allow-lists |
| Anti-money-laundering rules | KYC and AML screening, ongoing monitoring and reporting |
| Transfer restrictions | Permissioned tokens (for example ERC-3643) that block ineligible transfers |
| Official register of holders | A reconciled register, with the legal register kept where the law requires |
| Investor information | Documents, disclosures and reports delivered and recorded |
| Licensed trading | Connection to a licensed venue or broker for secondary trading |
A practical sequence
- Define the asset, the investors and the markets you want to reach.
- With counsel, classify the token and choose the legal wrapper and jurisdiction.
- Identify the licences needed — your own or a partner’s.
- Design the platform around those rules.
- Build, audit and launch, with compliance reporting from day one.
Coretos plans this path with your legal team and builds the tokenization platform around the answer.