Is Tokenisation Safe, Legal, and Can Anyone Get Ripped Off? Founders Are Asking and the Answers Are More Complicated Than the Platforms Let On.

Founder Researching the Risks

I recently ran a poll asking UK founders where they stand on equity tokenisation as a pre-seed and seed fundraising route. The results were striking. What they revealed, combined with conversations I have been having with some of the most prominent platforms in this space, raises questions that I think need to be part of a much wider conversation, including with regulators.

What the Founders Said

The poll responses divided as follows: 8% said they are actively exploring equity tokenisation as a fundraising route; 38% said it is on their radar but they have not acted yet; 19% said they do not know where to start; and just 6% said they had looked at it and moved on.

Put another way, three quarters of respondents are either already moving or paying close attention, and nearly one in five are interested but have no clear entry point.

The questions that come up most often when I speak with founders directly are not technical. They are not about blockchains or smart contracts. They are: is it safe? Is it legal? And is it possible for someone to get ripped off, either the founder or the investor?

Those are exactly the right questions. And after spending considerable time talking to the platforms that would power these raises, my honest view is that the answers depend entirely on which platform you choose, how that platform has structured its verification process, and, critically, what regulatory permissions it actually holds in the UK. That last point is one the market has not been nearly transparent enough about.

The Asset Class That Should Have Been the Safe Bet

Before getting to equity tokenisation specifically, it is worth looking at where tokenisation has already run into serious difficulty, because the lesson is instructive. Property tokenisation has been, by most measures, the most widely adopted tokenisation model to date. The logic is intuitive: the underlying asset is bricks and mortar, something most people understand and can visualise. It generates rental income. It has a physical address. It does not require investors to understand monetary policy or protocol economics. Of all the asset classes to tokenise, real estate seemed like the one with the most obvious foundations.

Earlier this year, a US-based real estate tokenisation platform suspended payouts to investors across a portfolio of fractional property holdings. According to reporting at the time, the portfolio had processed over $150 million in assets across hundreds of properties. The technology itself, by all accounts, performed without fault: smart contracts executed correctly, tokens were distributed, the platform interface functioned as designed. What failed, according to subsequent reporting, was the underlying deal structure: properties with documentation gaps, accumulated tax liabilities, and unresolved legal disputes that eventually brought rental collection to a halt.

The technology worked. The structure did not. And here is the part that should give every founder pause: the asset class that was supposed to be the most intuitive, the most grounded, and the easiest for ordinary investors to understand, turned out to be the one where structural failure was most publicly visible. Familiarity with an asset is not the same as rigour in how it has been packaged. That gap is exactly what verification processes exist to close.

What I Found When I Spoke to the Platforms

I have been in direct conversation with most of the prominent tokenisation platforms globally, focused on understanding how their technology works and what their plans are for operating in the UK market. The differences in approach to document verification at the point of issuance are significant, and not all of them are reassuring.

Some platforms have built verification in as a genuine process requirement. Brickken, for example, requires documentation to be in place before a raise can proceed, with KYC, KYB, and real-time asset backing verification embedded in the platform logic. DigiShares takes a similarly structured approach, treating appropriate documentation as a condition of activation rather than an optional step. On these platforms, a raise cannot launch without the right paperwork. That is not a selling point; it is a baseline.

The picture looks different with some of the platforms building their presence in North American markets and beginning to explore the UK. In conversation with one such platform, I asked directly about what the platform verifies before a raise proceeds. The answer, offered frankly, was that documentation requirements are essentially the founder's responsibility to manage. There is no process lock preventing a raise from launching without verified supporting materials. When I pressed further, someone on the team made the point in terms I found difficult to dismiss: in the absence of any verification step, nothing prevents a founder from uploading a completely irrelevant document. Who checks it, they asked, and what difference does it make?

I found that statement more revealing than any brochure or product demo. It reflects an assumption about where platform responsibility ends and founder responsibility begins that may be workable in some markets. In the UK, I do not believe it is.

The Licensing Gap Nobody Is Talking About Loudly Enough

Here is the point I think deserves the most attention, and the one I believe needs to be part of an open conversation with the FCA and with the wider market.

The majority of tokenisation platforms operating internationally present themselves as technology providers. They are building infrastructure, not giving advice. Some hold regulatory licences in other jurisdictions: in the United States, Singapore, Estonia, the British Virgin Islands, and elsewhere. In those markets, depending on the scope of their licence, they may be permitted to discuss the fundraising process in some detail, explain the mechanics of a raise, operate an exchange or secondary market place, and in some cases provide guidance that edges toward advice.

In the UK, without FCA authorisation, they cannot do any of that. Financial promotion rules are strict. Advising on investments without authorisation is a criminal offence. The platforms know this, and they are careful about how they position themselves as a result. Most will tell you clearly that they are a technology platform, that they are not your financial adviser, and that you should seek independent professional advice.

That is legally correct. It is also, in practice, a significant problem. Founders who are trying to understand whether equity tokenisation is the right route for their raise, what structure they should use, what their obligations to investors are, and what due diligence investors will expect: these are not technology questions. They are financial and legal questions. And the platforms that could speak most directly to those questions, having processed dozens or hundreds of comparable raises, are the ones that are most constrained in the UK from sharing what they know.

The result is a structural advice gap at precisely the moment when founders most need guidance. They are being asked to make regulated financial decisions, often for the first time, with the support of a technology platform that, in the UK context, legally cannot advise them on the decision they are making. That is not a criticism of the platforms. It is a description of a regulatory reality that has not yet been resolved, and that I think needs to be named clearly.

What This Means for the UK's Credibility in This Market

The FCA published its guidance on applying Consumer Duty to cryptoasset and digital securities firms in January 2026. The authorisation gateway for regulated crypto activities is expected to open in September 2026. The FCA Digital Securities Sandbox is operational. These are serious and considered moves, and they reflect a regulator that is building infrastructure deliberately rather than reacting to events.

But regulatory infrastructure only works if the firms operating within it meet the standard it implies. A platform arriving in the UK market with a verification process that amounts to an unmonitored document upload, and with no regulatory permissions that would allow it to support the founders using it, is not well positioned for the environment the FCA is creating. And the founders who raise on those platforms may find themselves exposed in ways they did not anticipate.

I think this conversation needs to happen now, before the market scales, rather than after a UK equivalent of the US property case makes it unavoidable. The FCA has shown it is willing to engage thoughtfully with digital securities as an emerging asset class. The question of what platforms should be required to verify before a raise proceeds, and what support they should be permitted to offer founders in a regulated context, seems to me like exactly the kind of practical question the sandbox and the consultation processes exist to address.

What Founders Should Do in the Meantime

The opinions in this article are my own, based on my direct conversations with platforms and my reading of the regulatory environment. Nothing here constitutes financial or legal advice, and I would encourage any founder seriously exploring tokenisation as a route to raise to take independent professional counsel before proceeding.

With that said, here is what I would ask any platform before committing to it for a UK raise. What documentation is required before a raise can proceed, and does the platform verify it or simply collect it? Is there a process lock, or is compliance the founder's declaration to manage? What regulatory permissions does the platform hold, and specifically, what is it authorised to do in the UK? And has it been designed for UK regulatory expectations, or is it being adapted from a structure built for a different market?

The answers will tell you whether a platform has genuinely thought through what operating responsibly in the UK requires. Some have. Not all of them have. And at this stage of the market, that distinction matters more than any feature comparison or fee structure.

Founders are walking toward equity tokenisation in real numbers. The platforms, the regulators, and the advisers who serve this market have a shared interest in making sure the infrastructure they find when they arrive is built to a standard the UK can be proud of.

Disclaimer: This article represents the personal opinions of the author based on conversations with platform representatives and publicly available information, and does not constitute legal, financial, or investment advice. References to reported events are based on publicly available reporting at the time of writing and do not represent the author's independent findings or allegations. The regulatory treatment of tokenised assets and digital securities varies by jurisdiction and continues to evolve. Readers should seek independent professional advice before making any financial, legal, or regulatory decisions.