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Legal advisory and support for security token (STO) projects

Legal advisory and support for security token (STO) projects

  • Legal classification of tokens and assessment of regulatory risks
  • Preparation and legal review of documentation for token issuance and secondary trading
  • Jurisdiction selection and cross-border regulatory structuring
  • KYC/AML support and regulatory engagement

Unlock your options — consult with an expert today

About the program

Mirsatori provides end-to-end legal support for security token issuance projects—digital representations of financial assets or rights to them on a blockchain. Depending on their structure and the rights they confer, security tokens may be classified as securities and therefore subject to applicable securities and capital markets regulation. We help clients build a legally robust issuance model, navigate required regulatory procedures, and ensure compliance with the legal requirements of the target jurisdictions.

Benefits of security tokens

Security tokens can be an effective tool for both issuers and investors, provided they are properly structured and comply with applicable regulatory requirements.

Expanded access to capital Access to a broader investor base through a digital issuance format—within the boundaries of applicable regulation.
Cost efficiencies Automation of certain issuance, recordkeeping, and distribution/corporate action processes using smart contracts and digital infrastructure.
Faster settlement Shorter settlement cycles and transfer of rights compared to traditional multi-step clearing workflows—subject to the chosen market infrastructure.
Flexible structuring of issuance terms The ability to define and legally document tokenholder rights and transfer terms with greater precision in the offering documentation, while remaining compliant with applicable legal requirements.
Fractional ownership The ability to acquire fractional interests in high-value assets, such as real estate, art, or venture-backed projects.
Potential liquidity The ability to trade on digital venues outside the standard trading hours of traditional exchanges—subject to venue rules and applicable regulatory restrictions.
Transparency and traceability Recording transactions and entitlements on a distributed ledger, which can simplify auditability and tracking of ownership history.
Programmable terms Automation of distributions and corporate actions (e.g., income payouts or voting) where provided for in the offering terms and implemented through smart contract logic.

Which assets can be tokenized?

  • Company shares (ordinary and preferred)
  • Ownership interests in businesses (LLC interests, partnership interests)
  • Interests in holding and SPV structures
  • Fund units/interests (including private equity and venture funds)
  • Bonds
  • Loans
  • Mortgage receivables/claims
  • Other debt claims and obligations
  • Commercial and residential property
  • Fractional interests in property
  • Rights to rental income and other real-estate cash flows
  • Fine art
  • Collectibles
  • Other high-value assets
  • Gold
  • Oil
  • Carbon credits
  • Other commodity assets
Get a detailed guide to the legal structure and regulation of security tokens

Get a detailed guide to the legal structure and regulation of security tokens

  • What security tokens are and how they differ from utility tokens
  • Which rights and assets are typically tokenized and how this is documented legally
  • Which baseline requirements for issuance and trading apply in most jurisdictions in 2026
Get a guide

Types of Security Tokens

Equity Tokens

A digital representation of an equity interest (analogous to shares or ownership interests) that embeds corporate and/or proprietary rights. Typically, these include: the right to participate in profits (dividends/distributions), voting rights on corporate matters (where provided for in the issuance terms), and the right to participate in the distribution of assets upon liquidation.

Debt Tokens

Tokenized debt instruments (analogous to bonds, loans, and certain types of secured claims). Key parameters include a fixed or floating interest rate, maturity, and the issuer’s credit risk.

Asset-Backed Tokens

Tokens whose economic value is linked to, and/or supported by, an underlying asset (where such linkage is properly documented and legally enforceable). Examples of underlying assets include real estate, precious metals, commodities, and works of art.

Regulatory specifics of security tokens:
key requirements

Security tokens are treated as securities in most jurisdictions and are therefore subject to the relevant securities regulation:

The UAE (SCA / DFSA (DIFC) / ADGM FSRA)

  • In the UAE, security tokens are generally assessed within the securities markets framework; the primary focus is on the token’s legal classification, the offering model, and the roles of the infrastructure participants.
  • Depending on each participant’s role, licensing may be required (venues/exchanges, broker-dealers, custodians, etc.), along with compliance with the rules of the relevant regulator.
  • ADGM (FSRA): where the token exhibits securities characteristics, it is typically classified as a Digital Security, and a securities-style regulatory regime applies.
  • DIFC (DFSA): a “Security Token” falls under the Investment Tokens category and is regulated under DFSA rules as an investment instrument broadly aligned with securities regulation.
Learn more

The EU (ESMA / national competent authorities)

  • The key question is whether the token falls within the definition of a financial instrument; if it does, MiFID II applies (rather than the MiCA regime).
  • Where there is a public offer and/or admission to trading (listing/admission), Prospectus Regulation requirements and related disclosure obligations may apply, depending on the transaction structure and the applicable thresholds.
Learn more

The United States (SEC)

  • If a token is classified as a security, the offering must be registered with the SEC or structured under an applicable exemption (commonly Reg D, Reg S, or Reg A).
  • In practice, the key focus is selecting the appropriate exemption and strictly complying with its conditions, including investor eligibility requirements, distribution/resale restrictions, and limitations on marketing communications.
Learn more

Singapore (MAS)

  • If a token constitutes a capital markets product (e.g., a security, a debenture, or an interest in a collective investment scheme), the Securities and Futures Act (SFA) applies.
  • For security token offerings, a prospectus is typically required unless a prospectus exemption applies. Exemptions are available only if the prescribed conditions and limitations are met, including restrictions on advertising and distribution.
Learn more
Legal assessment and advisory for security token projects

Legal assessment and advisory for security token projects

  • Determination of the token’s legal classification and the applicable regulatory regime
  • Review of the key requirements in the selected jurisdictions and the related compliance risks
  • Guidance on which approvals, licenses, or exemptions may be relevant to the project

Unlock your options — consult with an expert today

Mirsatori legal and regulatory services for security tokens

Regulatory analysis and classification
  • Token classification: determining the token’s legal status in the target jurisdictions (security / utility / hybrid).
  • Jurisdiction selection: analysing regulatory regimes and recommending an optimal structure aligned with the business model and target markets.
  • Compliance roadmap: preparing a jurisdiction-by-jurisdiction overview of the key regulatory requirements across the project’s footprint.
Apply now
Issuance structuring
  • Offering architecture: designing the offering structure in line with applicable law (private placement, public offering, regulatory exemptions).
  • Investor qualification: advising on investor eligibility requirements and verification procedures across jurisdictions.
  • Restrictions and lock-ups: developing token transfer restriction and lock-up mechanisms to meet regulatory requirements.
Apply now
Documentation support
  • Prospectus / PPM: preparing an issuance prospectus or a Private Placement Memorandum with compliant disclosures.
  • Tokenomics and White Paper: documenting the economic model and the supporting project materials.
  • Investor documentation: drafting subscription agreements, participation terms, and the full set of transaction legal documents.
Apply now
Regulatory engagement
  • Registrations and filings: supporting registration procedures and the submission of required notices to the competent authorities.
  • Approvals and licensing: assisting with obtaining the necessary approvals and licenses for the issuance and trading of tokens.
  • Representation: managing communications with regulators, responding to inquiries, and supporting inspections and reviews.
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Operational compliance
  • AML/KYC: implementing investor identification procedures and AML compliance controls.
  • Data protection: ensuring compliance with GDPR and applicable local personal data laws.
  • Marketing compliance: reviewing materials and communications for compliance with marketing restrictions applicable to instruments regulated as securities.
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Protection of interests
  • Disputes and proceedings: representing clients in matters involving claims or enforcement actions by regulators or investors.
  • Intellectual property: protecting the project’s technology and branding.
Apply now

Working process with Mirsatori

Working process with Mirsatori

Determining the token’s legal classification

The project and tokenomics are reviewed to determine the token’s legal characterization in the target jurisdictions (security / utility / hybrid) and to identify the key regulatory risks. Get a consultation

Jurisdiction selection and project structuring

Development of the legal framework: selection of jurisdictions, offering format (private placement / public offering / exemptions), allocation of participant roles (issuer / venue / custodian), and definition of the baseline compliance architecture. Get a consultation

Legal documentation preparation

Preparation of the full documentation package aligned with the chosen structure: PPM/prospectus (where required), White Paper/product description, investor agreements and issuance terms, as well as the supporting policies and disclosures. Get a consultation

Regulatory filings and registration

Support for submissions to the relevant regulators and the required registration/notification procedures, handling follow-up inquiries and progressing the process through to the necessary approvals/authorisations. Get a consultation

Token issuance and primary offering

Support for the minting/issuance and primary offering: legal review of communications, investor onboarding and admission procedures, applicable transfer restrictions and lock-up periods, and compliance with the offering terms. Get a consultation

Listing and secondary trading

Advisory support on listing and secondary trading on eligible venues, as well as custody arrangements and cross-border access, taking into account applicable jurisdictional requirements. Get a consultation

Ongoing legal and regulatory oversight

Ongoing compliance support, including KYC/AML maintenance, updates to documentation and procedures, monitoring of marketing restrictions, and guidance on regulatory changes. Get a consultation

Who needs legal support for security token projects

  • Companies planning to tokenize assets and receivables/claims
  • Startups raising capital through an STO / security tokens
  • Investment funds developing tokenized investment products
  • Real estate developers structuring tokenization of properties or fractional interests
  • Financial institutions launching or supporting the issuance of digital securities

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FAQ

How is a security token different from a utility token?

A security token grants the holder proprietary and/or corporate rights (for example, rights to income, an equity-like interest, or voting—where provided for) and may fall within securities/financial instruments regulation. A utility token typically provides access to a product or service and is not intended to confer rights characteristic of securities.

Is registration of a security token mandatory?

Not always, but compliance with the applicable securities regime is almost always required: either registration/prospectus requirements, or an offering structured under available exemptions (e.g., private placement, limited investor base)—depending on the jurisdiction and the offering structure.

What is the typical timeline to prepare and launch an STO?

Timelines depend on the jurisdiction, offering structure, document readiness, and whether regulatory procedures are required. In practice, this is usually several months, with the exact timeline confirmed after a legal assessment of the structure and the regulator’s requirements.

Can security tokens be sold to retail investors?

It depends on the jurisdiction and the offering structure. Many regimes restrict sales to non-qualified/retail investors, or require additional disclosure and investor protection measures.

Which documents are typically required for an STO?

Typically, a package of disclosure and contractual documents is prepared: a PPM/prospectus (where applicable), a project description (white paper / information memorandum), issuance terms, subscription/participation documentation (subscription agreements / terms), and compliance policies depending on the model.

Which compliance requirements are most common?

Most commonly: KYC/AML procedures, disclosure obligations, and marketing/promotion restrictions (especially where the token is classified as a security), as well as requirements for licensed infrastructure participants (venues, broker-dealers, custodians)—depending on the jurisdiction.

Get expert guidance on your case
Schedule a meeting with our specialists, in-office or online, and receive a tailored case analysis, a clear cost estimate, and the best solution to achieve your goals.

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