Advising Robinhood on pioneering real-world asset tokenisation project

We advised Robinhood on the establishment of a Jersey issuer, an indirect subsidiary of Robinhood Markets, Inc., which will issue debt security tokens.

The tokens are structured as debt securities and will provide investors with exposure to the performance of underlying equities, ETPs and equivalent assets. Token holders have the benefit of a security interest over the underlying securities, with collateral monitored daily by the issuer and verified periodically by a third-party verification agent.

Following issuance, tokens may be transferred on blockchain infrastructure between investors. All participants redeeming directly with the issuer are required to comply with Jersey’s anti-money laundering framework prior to redemption.

Our role included advising on the Jersey legal and regulatory treatment of the structure, engaging with the Jersey Financial Services Commission in relation to the proposed framework, and preparing and filing the relevant regulatory applications.

Commenting on the transaction, Dilmun Leach, Investment Funds & Corporate partner, said:

'We were really pleased to support Robinhood with its launch in Jersey. This project reflects the continued convergence of traditional financial markets and digital asset infrastructure. Jersey continues to demonstrate its capability to support complex and innovative transactions of this nature.'

Gemma Palmer, Regulatory & Risk Advisory partner, added:

'The regulatory analysis required for this structure is necessarily detailed and multi-faceted, particularly given the interaction between digital asset features and established financial services frameworks. This project highlights Jersey’s ability to be agile, applying a principles based approach and offering regulatory certainty to these structures.'

Our team drew on expertise across multiple practice areas and jurisdictions and was led by partner Dilmun Leach (Investment Funds & Corporate, Jersey), supported by partners Gemma Palmer (Regulatory & Risk Advisory, Jersey) and James Lydeard (Banking & Finance, Jersey) and senior counsel Sarah Townsend (Investment Funds & Corporate, Jersey).

The wider team included partners Chris Hutley Hurst (Regulatory & Risk Advisory, Guernsey), Sian Langley (Regulatory & Risk Advisory, Jersey) and Iona Wright (Regulatory & Risk Advisory, BVI), senior counsel Luke Steele (Investment Funds & Corporate, Jersey) and associates Metumo Shilongo (Regulatory & Risk Advisory, Jersey), Ellen Hurst (Investment Funds & Corporate, Jersey) and Alex Crockart (Banking & Finance, Jersey).

We worked alongside onshore counsel Simmons & Simmons and closely with Cavendish Fiduciary (Jersey) Limited, as corporate services provider to the Jersey issuer.