Does owning a token mean I own the underlying asset?

Not by itself. A token gives you control over an entry on a blockchain; whether that entry is ownership of a share, a claim against an intermediary, or a contract with a token issuer is set by the legal documents. Even in the strongest case, an issuer recording its own fund shares on-chain, you own a fund share, not the Treasury bills the fund holds. Read what the offering document says the token represents.

What is the difference between record ownership and beneficial ownership?

The record owner is the name (or wallet) on the issuer's register; the beneficial owner is the person entitled to the economic benefits. In conventional markets most shares are recorded in the name of a depository's nominee while investors are the beneficial owners through their brokers. Tokenization can collapse the two, when the wallet is on the issuer's register, or add a layer, when a token issuer holds the asset and the tokenholder has a claim against the token issuer.

If my wallet holds the token, can anyone take it away?

Often, yes, within the documents' terms. Tokenized securities are usually issued with administrator functions that let the issuer or transfer agent freeze a wallet, burn tokens and reissue them, or force a transfer, for example to comply with a court order, sanctions, a lost-key recovery or an error. Franklin's FOBXX prospectus says shares on the transfer agent's system are under its unilateral control; Figure's YLDS documents say the transfer agent can correct records. That is a protection when a key is lost and a limit on what 'self-custody' means.

What happens if I lose the private key to a tokenized security?

For a registered security whose official record is kept by a transfer agent, ownership does not disappear with the key: the transfer agent can typically verify identity, cancel the lost tokens and issue replacements to a new approved wallet, under the procedures in the documents. For a token whose only record is the token contract and that has no administrator, a lost key can mean a lost asset. Which applies is a question for the terms, and it is one of the clearest tests of whether the token is the asset or only a pointer to it.

Am I a shareholder if I hold a tokenized stock?

Only in the issuer-sponsored model, where the company itself issues and records the tokenized shares. In the custodial model you hold an entitlement through the intermediary, which may pass through dividends and votes the way a broker does. In the synthetic model you are not a shareholder at all: Backed's xStocks carry no voting rights and reinvest dividends through a rebasing multiplier, and Dinari's non-US terms say the holder's repurchase right confers no 'equity, redemption, or ownership interest' in the underlying shares.

Who do I have a claim against if something goes wrong?

Follow the chain. In the issuer-sponsored model your claim is against the issuer of the security (the fund or company). In the custodial model it is against the securities intermediary, with the property protection Article 8 of the UCC gives entitlement holders. In the synthetic model it is against the token issuer, usually an offshore special purpose vehicle, as an unsecured or secured creditor depending on the terms. The asset you can see on a price chart may be several legal steps away from the entity you can actually sue.

Token Ownership vs Beneficial Ownership

Tokenized Real-World Assets

Definition

Token ownership is control of a token: the ability to sign a transaction from the wallet that holds it. Beneficial ownership is the legally enforceable right to the economic benefits of an asset (income, proceeds on sale or redemption, and usually voting), whoever is named as the legal or record owner. In tokenized products the two can coincide, diverge, or have nothing to do with each other. When an issuer records its own securities on a blockchain and the documents make the on-chain record the official register, the wallet that holds the token is the record holder of the security. When a third party holds the asset in custody and issues a token representing it, the tokenholder typically has a security entitlement against that intermediary rather than a direct claim on the asset. When the token is the third party's own price-tracking instrument, the holder has a contract with that third party and, in the SEC staff's words, 'no claims or rights against the issuer of the referenced security'. In every case the governing documents, not the token, decide what the holder owns, and most of those documents reserve the right to correct, freeze or reissue the on-chain record.

Why it matters

The marketing of tokenized assets leans on the idea of owning the asset directly, in your own wallet, with no intermediary. The documents usually say something narrower. AltStreet's reviews found the gap in each structure it examined. Franklin's FOBXX is as close to direct ownership as a fund gets: the shares are recorded as BENJI tokens on the fund's own register, yet the prospectus keeps the transfer agent's power to control and correct that register. Figure's YLDS certificates are recorded on Provenance but transferable only between wallets that have passed Figure's AML and KYC checks. Dinari's US product records a brokerage position, and the app calls the token 'not a separate investment'; its non-US product is a contract with Dinari, not a share. Lofty's tokens are membership interests in a Wyoming LLC that holds the deed, so the holder owns part of an LLC, not part of a house. The practical consequences are concrete: who pays you if the token issuer fails, whether you can vote, whether a lost key is recoverable, and whether the price you see on a venue can be enforced against anyone at net asset value.

Common misconceptions

•Holding the private key is not the same as owning the asset. The key controls the token; the documents decide what the token is a claim to and against whom.
•On-chain records are not automatically the legal record. In many products the transfer agent's off-chain records control, and the token only signals a transfer for the agent to record.
•A one-for-one backing claim is not ownership. 'Backed one-for-one by shares' describes what the token issuer says it holds; the holder's rights to those shares depend on whether the structure is custodial (an entitlement) or synthetic (a contract with the issuer).
•Beneficial ownership through an intermediary is not inherently weak. Most stock investors hold this way through brokers, and Article 8 of the UCC gives entitlement holders a property interest that ranks ahead of the intermediary's general creditors. The weak case is a contract with a thinly capitalized token issuer, not intermediation as such.
•Self-custody of a tokenized security does not remove the issuer's control. Administrator functions to freeze, burn, reissue or force-transfer tokens are standard in permissioned token standards such as ERC-3643.

Technical details

Three kinds of ownership, defined

Control (token ownership): the ability to move the token by signing from the wallet that holds it. A purely technical fact; it carries legal rights only if the documents say it does.

Record ownership: being named on the issuer's register (the 'master securityholder file' kept by the issuer or its transfer agent). For registered securities, the record owner is the person the issuer recognizes for dividends, votes and notices.

Beneficial ownership: entitlement to the economic benefits and usually the voting of a security, whether held directly or through an intermediary. Under Article 8 of the UCC, a person holding through a broker or custodian has a 'security entitlement', a bundle of rights against the intermediary plus a pro rata property interest in the intermediary's holdings of that security.

Worked example: a tokenholder, an SPV and a custodian

Set-up: an offshore special purpose vehicle (the token issuer) buys 1,000 shares of a listed company through a broker, which holds them for the SPV at a custodian bank. The SPV issues 1,000 tokens to investors, each said to be backed by one share.

Link 1, custodian to broker to SPV: the shares are held at the depository in its nominee's name; the custodian and broker hold security entitlements; the SPV holds a security entitlement in its account at the broker. The SPV is the beneficial owner of the shares through that chain.

Link 2, SPV to tokenholder, custodial version: if the documents make the token a security entitlement and the SPV acts as the holder's securities intermediary, each tokenholder has an entitlement against the SPV and a pro rata property interest in the 1,000 shares it holds for them, which under UCC 8-503 are not property of the SPV available to its general creditors.

Link 2, synthetic version: if the token is the SPV's own note or certificate that pays the share price, the tokenholder is a creditor of the SPV. The 1,000 shares belong to the SPV; whether holders have a security interest in them, and what ranks ahead (fees, other creditors, the custodian's lien), depends on the security and trust documents.

Result: the same 1,000 shares and the same 1,000 tokens give a property interest in one structure and a creditor claim in the other. The question to ask is not 'is it backed' but 'what is my claim if the SPV fails'.

What the documents AltStreet read say

Franklin OnChain U.S. Government Money Fund (FOBXX): one share equals one BENJI token at a $1.00 net asset value; the register is kept on public blockchains by Franklin's transfer agent; the prospectus says shares on the transfer agent's system are under its unilateral control and that it can correct the record (review of October 4, 2026).

Figure YLDS: certificates are debt of Figure Certificate Company recorded by its transfer agent, Figure Equity Solutions, through a 'proprietary blockchain-integrated system'; transfers only between wallets that have passed AML and KYC checks; the transfer agent can correct records (review of October 16, 2026).

Dinari: in the US, shares sit in a brokerage account carried by Alpaca and the token records the position; outside the US, the holder's repurchase is 'a contractual put right' conferring no 'equity, redemption, or ownership interest' in the shares (review of October 3, 2026).

Backed xStocks: tracker certificates, debt instruments of Backed Assets (JE) Limited, a Jersey SPV; holders get economic exposure, not share ownership, voting rights or brokerage protections (review of July 2, 2026).

Lofty: each property is deeded to a Wyoming DAO LLC; the tokens are the LLC's membership interests; holders vote on managers, repairs, loans and sales, most decisions needing 60% (review of October 5, 2026).

Administrator powers that override the wallet

Freeze: blocking a wallet from sending or receiving, used for sanctions, court orders and suspected fraud.

Burn and reissue: cancelling tokens in one wallet and minting replacements in another, used for lost-key recovery and error correction.

Forced transfer: moving tokens without the holder's signature, used to enforce judgments or correct the register.

Allowlisting: transfers succeed only between wallets the issuer has approved, which keeps the register limited to identified, eligible holders and means a token cannot simply be sold to anyone.

Upgradeable contracts: the administrator can change the token's code. Each power protects the register; each also means the holder's position is subject to whoever holds the administrator keys.

Voting, distributions and information rights

Issuer-sponsored shares carry the class's rights: FOBXX holders are fund shareholders; Lofty holders vote under the LLC's operating agreement.

Custodial entitlements pass rights through the intermediary, as a broker passes proxy materials and dividends; how well this works depends on the intermediary's procedures.

Synthetic instruments carry only the rights in their own terms. Dividends may be reinvested by adjusting the token amount (Backed's rebasing multiplier) or paid as cash; votes in the referenced company are typically not passed through.

Information: a fund shareholder receives the fund's reports and audited statements; a synthetic holder receives what the token issuer publishes about itself, which may be little.

Checklist: establishing what you own

Find the sentence in the offering document that says what the token represents: a share, an entitlement, a note, a certificate, or an LLC interest.

Name the entity you have a claim against and check its regulatory status, its auditor and its capital.

Find where the official record is kept and who can change it, and read the freeze, burn, reissue and forced-transfer provisions.

Check whether the underlying asset is held for you (segregated or omnibus, in whose name, at which custodian) or owned by the token issuer.

Read the lost-key procedure. If there is none, the token is the only record and the key is the asset.

Frequently asked questions

Does owning a token mean I own the underlying asset?: Not by itself. A token gives you control over an entry on a blockchain; whether that entry is ownership of a share, a claim against an intermediary, or a contract with a token issuer is set by the legal documents. Even in the strongest case, an issuer recording its own fund shares on-chain, you own a fund share, not the Treasury bills the fund holds. Read what the offering document says the token represents.
What is the difference between record ownership and beneficial ownership?: The record owner is the name (or wallet) on the issuer's register; the beneficial owner is the person entitled to the economic benefits. In conventional markets most shares are recorded in the name of a depository's nominee while investors are the beneficial owners through their brokers. Tokenization can collapse the two, when the wallet is on the issuer's register, or add a layer, when a token issuer holds the asset and the tokenholder has a claim against the token issuer.
If my wallet holds the token, can anyone take it away?: Often, yes, within the documents' terms. Tokenized securities are usually issued with administrator functions that let the issuer or transfer agent freeze a wallet, burn tokens and reissue them, or force a transfer, for example to comply with a court order, sanctions, a lost-key recovery or an error. Franklin's FOBXX prospectus says shares on the transfer agent's system are under its unilateral control; Figure's YLDS documents say the transfer agent can correct records. That is a protection when a key is lost and a limit on what 'self-custody' means.
What happens if I lose the private key to a tokenized security?: For a registered security whose official record is kept by a transfer agent, ownership does not disappear with the key: the transfer agent can typically verify identity, cancel the lost tokens and issue replacements to a new approved wallet, under the procedures in the documents. For a token whose only record is the token contract and that has no administrator, a lost key can mean a lost asset. Which applies is a question for the terms, and it is one of the clearest tests of whether the token is the asset or only a pointer to it.
Am I a shareholder if I hold a tokenized stock?: Only in the issuer-sponsored model, where the company itself issues and records the tokenized shares. In the custodial model you hold an entitlement through the intermediary, which may pass through dividends and votes the way a broker does. In the synthetic model you are not a shareholder at all: Backed's xStocks carry no voting rights and reinvest dividends through a rebasing multiplier, and Dinari's non-US terms say the holder's repurchase right confers no 'equity, redemption, or ownership interest' in the underlying shares.
Who do I have a claim against if something goes wrong?: Follow the chain. In the issuer-sponsored model your claim is against the issuer of the security (the fund or company). In the custodial model it is against the securities intermediary, with the property protection Article 8 of the UCC gives entitlement holders. In the synthetic model it is against the token issuer, usually an offshore special purpose vehicle, as an unsecured or secured creditor depending on the terms. The asset you can see on a price chart may be several legal steps away from the entity you can actually sue.