Understanding Token Ownership in Digital Equity: Insights from the UKJT Report
Updated: Oct 7
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.
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.
How we got here
The report is the latest step in a process that began with the Law Commission. Its June 2023 report on digital assets concluded that some crypto-tokens and similar assets can be property even though they are neither things in possession nor things in action, and recommended legislation confirming a third category of personal property. The Commission published a draft bill in July 2024, and the Property (Digital Assets etc) Act 2025 received Royal Assent on 2 December 2025.
The Act deliberately does not define control, leaving the courts to develop it in the way they developed possession. The Law Commission recommended an expert panel to explain how control works in practice, and the Lord Chancellor invited the UKJT to convene it. The panel was led by Sir Antony Zacaroli, with David Quest KC among its members. Its report is not binding and is not a legal opinion, but it is written so that judges and court users can refer to it as the law develops.
The report describes several forms of control: direct control through private keys, shared control such as multisignature wallets, control through smart contracts, and delegated or layered control where a custodian holds keys for someone else. It stresses that there is no single test and that each system has to be assessed on its own facts. It also draws a useful line. Knowing the password to a bank account is not control in this sense, because deleting a ledger entry does not extinguish the underlying debt. Holding a private key that can move an asset without a court's involvement is.
What it means for UK founders
For a company issuing tokenised shares, the central design question is who holds the keys at each layer. Where a platform or custodian holds keys on behalf of shareholders, the arrangement is delegated or layered control, and the documents need to make clear who the beneficial owner is and what the custodian may and may not do. This matters most when something goes wrong, because freezing orders, proprietary injunctions and disclosure orders often turn on who controls the wallets or keys.
Control is a factual question, separate from ownership. Where control has been lost, a claimant has to show how it was lost and who now exercises it, so clear records of key holders, signing thresholds and custody terms are worth keeping from the first issuance. Firms testing tokenised securities in the Digital Securities Sandbox will be working through the same questions. Founders may want to take professional advice on custody terms and on how the token record lines up with the company's own records before issuing.
Key facts at a glance
June 2023: Law Commission report concludes some digital assets can be personal property.
July 2024: Law Commission publishes a draft bill for a third category of personal property.
2 December 2025: the Property (Digital Assets etc) Act 2025 receives Royal Assent.
19 March 2026: the UKJT publishes its Report on Control of Digital Assets.
The panel was led by Sir Antony Zacaroli. The UKJT itself is chaired by Sir Geoffrey Vos, Master of the Rolls.
The report is non-binding guidance written for a non-technical audience, including judges.
Sources
Frequently asked questions
What is the UKJT Report on Control of Digital Assets?
It is a report published on 19 March 2026 by the UK Jurisdiction Taskforce, chaired by Sir Geoffrey Vos. It is the most authoritative guide English law has produced on the ownership and control of digital assets, including tokens representing shares.
Who owns a tokenised share under English law?
The UKJT report treats control as central to ownership. A person or entity with control over a token, meaning the ability to use it, transfer it and exclude others from it, may be treated as the owner for legal purposes.
How do digital tokens fit into English personal property law?
English law historically split personal property into things in possession and things in action, and digital assets do not fit neatly into either. The UKJT report explains how courts can recognise control over digital tokens as a form of property right.
What happens if the private keys to a tokenised share are lost or stolen?
Because control is key to ownership, losing the keys or having them stolen may shift control, and with it ownership. This raises complex legal questions, which is why custody arrangements and clear legal agreements matter.
What questions does the UKJT report on digital assets leave open?
Unsettled areas include how courts will handle forks, airdrops or smart contract failures, how token ownership interacts with company law rights such as voting or dividends, and cross-border issues when tokens and owners are in different jurisdictions.
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.
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