Understanding Token Ownership in Digital Equity: Insights from the UKJT Report

Tokenised equity is reshaping how companies raise capital and how investors hold shares.

Yet, a pressing question remains: if something goes wrong, who actually owns the token?

This question matters deeply when legal disputes arise, platforms fail, or unexpected scenarios occur after token issuance. The UK Jurisdiction Taskforce (UKJT) recently published a report that offers the clearest guidance yet on how English law views ownership and control of digital assets like tokens representing shares. This article explores the key insights from that report and what founders and investors need to understand about token ownership under English law.

Digital token representing equity ownership

Why Legal Token Ownership Matters

Tokens representing equity are not just digital files or codes. They stand for real ownership rights in a company. When everything works smoothly, ownership is clear: the token holder has the rights attached to the shares. But problems arise when:

• The platform hosting the tokens experiences technical failure or insolvency.

• There is a dispute between investors or between investors and the company.

• Legal questions emerge about who controls the token and what rights that control grants.

  
  

In such cases, when the legal ownership of the tokens is disputed, courts may need to step in. The question then becomes: how does English law treat these tokens? Are they treated like physical shares, contractual rights, or something else? The answers affect who can enforce rights, transfer ownership, or recover assets.

The UKJT Report’s Role in Clarifying Ownership

On 19 March 2026, the UKJT, chaired by Sir Geoffrey Vos, published its Report on Control of Digital Assets. This report is the most authoritative guide English law has produced on digital asset ownership and control. It builds on existing legal principles but adapts them to the realities of digital tokens.

Historically, English law divided personal property into two categories:

• Things in possession: Physical objects that can be held and transferred, like paper share certificates.

• Things in action: Legal rights enforceable through courts, such as debts or contractual claims.

  
  

Digital assets do not fit neatly into either category. They are intangible but can be controlled and transferred electronically. The report explains how courts can recognize control over digital tokens as a form of property right, giving token holders stronger legal standing.

What Control Means for Token Ownership

The report emphasizes the concept of control as central to ownership. Control means the ability to:

• Access and use the token.

• Transfer the token to others.

• Exclude others from using or transferring the token.

  
  

If a person or entity has control over a token, English law may treat them as the owner for legal purposes. This approach aligns with how physical possession works but adapts it to digital realities.

For example, if a founder holds the private keys to a tokenised share, they have control and thus ownership rights. If the keys are lost or stolen, control (and ownership) may shift, raising complex legal questions.

Practical Implications for Founders and Investors

Founders issuing tokenised equity and investors buying tokens should consider the following:

• Custody arrangements: Who holds the private keys or access credentials? Custodians must be trustworthy and legally accountable.

• Legal agreements: Clear contracts should define rights and responsibilities related to token control and transfer.

• Dispute resolution: Understand how courts may interpret control and ownership if conflicts arise.

• Platform risks: Assess the reliability and legal status of the platform issuing or managing tokens.

  
  

The UKJT report does not solve every uncertainty but provides a stronger legal foundation. It encourages founders to design token structures and agreements that reflect control principles to protect ownership rights.

The battle for control can be brutal and costly

What the Report Leaves Open

While the report advances clarity, some areas remain unsettled:

• How courts will handle complex scenarios like forks, airdrops, or smart contract failures.

• The interaction between token ownership and company law rights, such as voting or dividends.

• Cross-border issues when tokens and owners are in different jurisdictions.

  
  

Founders and investors should stay informed and seek professional legal advice tailored to their specific situations.

Summary

The UKJT’s report marks a milestone in defining who owns a token when things go wrong. It confirms that control over a digital token is key to ownership under English law. This clarity helps founders and investors understand their rights and risks in tokenised equity. Still, careful planning, clear agreements, and trusted custody remain essential to protect ownership in the evolving digital asset landscape.

Disclaimer: This article is provided for general information only and does not constitute legal, financial, or investment advice. 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.