tZERO vs. Securitize: The Patent Dispute Shaping RWA Tokenization

The race to dominate the tokenization of real-world assets (RWAs) is on. It is fast becoming one of the most fiercely contested segments in the cryptocurrency space.

As traditional financial institutions like BlackRock (BLK ), JPMorgan (JPM ), Franklin Templeton, and KKR increasingly adopt and invest in blockchain-based infrastructure for issuing, managing, and trading bonds, commodities, credit, and stocks, companies that spent years building the underlying technology are now seeking to protect their intellectual property and secure competitive advantages.

It is against this backdrop that two of the sector’s founding companies are locked in a courtroom battle.

tZERO has sent Securitize a cease-and-desist letter, accusing the latter of infringing patents covering tokenized securities infrastructure. In response, Securitize has filed a lawsuit in federal court, arguing that tZERO’s claims are without merit and that its products do not infringe on its patents.

Pitting two pioneers of tokenization against each other, this dispute marks one of the first major intellectual property battles in the fast-growing RWA tokenization industry, which is forecast to reach trillions of dollars.

This fight between tZERO and Securitize shows that the industry is maturing and that tokenization has become a real, monetizable battleground.

Everyone Wants a Piece of the Tokenization Boom

Bitcoin (BTC ) was launched in 2009 as a decentralized peer-to-peer electronic cash system. Then, six years later, the Ethereum (ETH ) network finally went live in July 2015.

Unlike Bitcoin, which is primarily a store of value, Ethereum is a programmable blockchain that enables the execution of applications and smart contracts. The introduction of programmable smart contracts made it possible to represent off-chain assets like art, real estate, and gold digitally on a blockchain.

Not only did Ethereum enable the tokenization of real-world assets (RWA), but it also remains the undisputed backbone of the RWA industry today, functioning as the primary platform for traditional finance institutions to bring assets on-chain.

Ethereum currently holds over 30% of the RWA market cap, which has surpassed $65 billion, thanks to the network’s deep liquidity, mature tooling, and broader ecosystem.

Real-world asset tokenization, at its core, is the process of converting tangible assets, traditional financial assets, economic rights, or other off-chain assets into digital tokens on a blockchain.

These assets include government bonds, money market funds, private credit, real estate, equities, commodities, carbon credits, and alternative investments.

The ownership rights of these assets aren’t replaced; tokenization creates blockchain-based representations of them that enable near-real-time settlement, programmable transfers, fractional ownership, and automated compliance, while maintaining legal claims to the underlying assets.

These digital representations, or digital tokens, can be traded, held, or divided far more efficiently than their traditional equivalents.

Public blockchains, after all, are open, decentralized, permissionless, and accessible 24/7, reducing cost, increasing speed, enhancing transparency and auditability, advancing financial inclusion, and improving security. These benefits make blockchains far superior rails compared to legacy systems.

Add to that global accessibility and fractional ownership, which allow smaller investors to participate in traditionally inaccessible asset classes, and tokenization revamps capital markets, operating not as a parallel financial system but as a faster, cheaper, more transparent version of the existing one.

The concept of tokenization isn’t new, though it has only recently captured mainstream attention. It has existed since the early years of blockchain technology, long before “RWA” became the buzzword.

For instance, over a decade ago, the online store Overstock.com announced plans to sell uncertificated digital securities on a decentralized alternative trading system. The idea was to offer the “world’s first cryptosecurity” on the new t0 platform, with the name derived from settlement timelines. Overstock.com’s much-anticipated security token trading platform eventually became tZERO.

Besides security tokens, tokenized real estate was among the earliest experiments to gain traction. Around the same time, Securitize was founded to modernize capital markets by digitizing private market assets.

However, adoption remained limited due to regulatory uncertainty, inadequate institutional infrastructure, and immature blockchain ecosystems.

For years afterward, tokenization stayed a niche corner of crypto, mostly ignored by institutional finance. But things began to change in 2023, when RWA value crossed the $1 billion mark. This pace of growth accelerated significantly in 2025, with the market growing from roughly $6 billion at the beginning of the year to almost $22 billion by the end.

In 2026, total RWA value, excluding stablecoins, reached north of $32 billion, as major financial institutions moved from experimentation toward deployment.

Over the past few years, several major asset managers, banks, and investment firms have launched tokenized funds and blockchain-based financial products, demonstrating growing confidence in regulated tokenization infrastructure.

BlackRock’s tokenized money market fund BUIDL, administered through Securitize, is one of the most notable examples. With total asset value exceeding $3 billion, BUIDL has become one of the largest tokenized Treasury products in the market. This year, it began trading on Uniswap, putting a regulated institutional product on a decentralized exchange (DEX).

This shows how established financial institutions increasingly view tokenization as core infrastructure rather than a niche crypto application.

A major contributor to the growing institutional adoption of tokenization has been regulatory clarity.

In Europe, MiCA has provided a clear path to operate within existing securities law. In the US, the GENIUS Act gives banks and asset managers the legal comfort to actually deploy capital on-chain.

Moreover, the SEC confirmed that securities represented on blockchains remain subject to existing federal securities laws, and a couple of months later, approved Nasdaq’s proposal to trade tokenized Russell 1000 securities, US Treasury securities, and major ETFs alongside traditional shares on the same order book.

“The result is that tokenization is being absorbed into existing regulatory perimeters, not being left outside them,” noted Coinbase in its report on major trends in tokenization.

Encouraged by these developments, institutional tokenization took off. Still, it’s only the beginning, with forecasts pointing toward exponential growth. For instance, Boston Consulting Group and Standard Chartered project the market will reach between $16 trillion and $30 trillion by 2030-2034.

With tokenization presenting a multi-trillion-dollar opportunity, it’s only natural that competition is intensifying.

Infrastructure providers, however, are competing not only for customers but to become the default foundational layer that would underpin future capital markets.

As RWA tokenization moves from a niche segment into a major, cutthroat business, companies are now investing heavily in compliance systems, custody solutions, issuance protocols, investor identity frameworks, and secondary trading infrastructure.

As the market matures, proprietary technology and patent portfolios have become strategic assets that can generate revenue and influence companies’ competitive positioning.

The Patent Dispute at the Center of the RWA Boom

The explosive growth of the RWA sector has transformed what was once a collaborative ecosystem into an increasingly competitive market, and as billions of dollars flow into the tokenized sector, intellectual property (IP) is becoming a valuable competitive weapon.

One of the most common forms of IP is a patent, which is an exclusive right granted for an invention. Having a patent provides inventors with legal protection from others making, using, selling, or importing their invention for a set period.

Patent infringement occurs when another party makes, uses, sells, or imports a patented invention without authorization from the patent holder.

In the technology world, patents grant the inventor a legally enforceable monopoly, create licensing opportunities, and prevent competitors from replicating proprietary solutions.

Patent disputes can have significant commercial implications. Successful enforcement may result in damages, licensing agreements, or injunctions that prevent the continued use of disputed technologies. But even if infringement isn’t found, litigation means substantial legal costs and uncertainty for customers, investors, and strategic partners.

One such patent dispute has now erupted in the RWA tokenization space, between tZERO and Securitize.

tZERO believes Securitize’s core tokenization infrastructure infringes on two of its patents: No. 11,216,802 (“Self-Enforcing Security Token Implementing Smart-Contract-Based Compliance Rules Consulting Smart-Contract-Based Global Registry of Investors”) and No. 11,394,560 (“Crypto Integration Platform”).

More specifically, this pertains to Securitize’s DS Protocol and Vault Registrar.

Last week, tZERO Group sent a cease-and-desist and reservation-of-rights letter to Securitize, demanding that the platform stop commercializing the products or it would seek injunctive relief and monetary damages.

Securitize publicly rejected the allegations. It says the products in question lack key elements, such as trade execution and transaction-signing functions, that tZERO’s patents cover.

Not only that, but the company has now filed an action seeking a declaratory judgment that it doesn’t infringe on patents owned by its rival.

“In light of tZERO’s allegations of patent infringement, today we filed a complaint in the US District Court for the District of Delaware seeking a declaratory judgment confirming that we do not infringe,” Securitize said in a post on X. “tZERO’s allegations are without merit and run counter to the spirit of fair play that defines our industry at its best. We will vigorously defend ourselves against these and any other meritless claims.”

Per the complaint filed in Delaware, which has a well-established business law framework, Securitize said that tZERO is out to “target those that have had success,” and is now asking the court for a declaratory judgment of non-infringement, as well as an injunction barring tZERO from using the patents against it.

Moreover, Securitize has alleged that tZERO’s actions aren’t a genuine effort to succeed in the marketplace, but rather the “culmination” of shareholder pressure to capitalize on the patents. The filing also suggests that tZERO is using the dispute to reassure its investors at a time when the tokenization sector has become very crowded and competitive.

Securitize’s defense is that its products don’t actually fall within the scope of tZERO’s patents. What’s more, Securitize argues that its rival’s patents are simply invalid. The company added the following in its X post:

“We look forward to responding to tZERO in court while continuing to build products that solve real challenges and earn the trust of industry leaders.”

Securitize seems to be just the opening act, as tZERO has said it is investigating at least six other market participants for potential intellectual property infringement related to its patent portfolio.

Those under tZERO’s sights include regulated RWAs and digital asset securities platforms, institutional infrastructure, prime brokerage and liquidity aggregation, decentralized sequencing and fair ordering, and decentralized exchanges and DeFi dark pools. The company expects to send demand letters to these firms once it’s done with the investigation.

The Fight for Tokenization’s Future

tZERO and Securitize are now heading toward a legal showdown just as the tokenization sector that these two companies helped create has begun to attract institutional investors on Wall Street.

Founded in 2014, tZERO is a digital securities infrastructure provider. It was launched as a subsidiary of Overstock.com but spun out from it in 2021.

tZERO now operates as an SEC-registered transfer agent. It is also one of only two firms in the US authorized to self-custody tokenized securities, through its Special Purpose Broker-Dealer subsidiary, and runs its own Alternative Trading System (ATS) for secondary trading of digital securities.

In 2022, Intercontinental Exchange, the parent company of NYSE, made a strategic investment in the company. Last year, tZERO unveiled its plans to go public.

The company has spent more than a decade building technology for regulated digital asset markets. This has resulted in a portfolio that tZERO says comprises 105 patents spread across 23 patent families worldwide.

Now, it intends to actively defend and monetize this decade-plus head start.

“tZERO and its investors have dedicated substantial time, research, and capital over the years to develop a leading intellectual property portfolio in the tokenization industry,” the company said in its official announcement on June 15. And as the tokenization industry scales and matures, “tZERO will remain vigilant in protecting its valuable intellectual property, market position and shareholders’ investment.”

Successful enforcement could strengthen tZERO’s market position, generate licensing revenue, and establish its patents as foundational technology within regulated tokenized markets.

Unsuccessful litigation, however, can weaken the commercial value of its portfolio and undermine an increasingly important strategic asset.

The rival, Securitize, is an RWA tokenization platform founded in 2017.

The company specializes in the issuance, management, and servicing of tokenized securities and real-world assets. Securitize operates the largest tokenization platform by assets under management, tokenizing over $4 billion and administering almost $25 billion across 650 funds.

“Tokenization is poised to be the most consequential upgrade to US capital-market infrastructure in a generation. As institutional adoption accelerates, we believe tokenization is evolving from isolated products into a fully interconnected financial system.”

– Co-founder and CEO Carlos Domingo

The company boasts partnerships with giants like BlackRock, Hamilton Lane, BNY, KKR, Apollo, and VanEck to provide tokenized fund and securities infrastructure.

This year, it also announced a collaboration with NYSE to develop infrastructure for trading tokenized stocks. According to Benchmark, capturing “just one basis point” of this $44 trillion market would more than double Securitize’s assets.

Much like tZERO, Securitize also plans to go public, which could happen as early as later this year through a merger with a Cantor-backed entity.

Notably, last month, it received FINRA approval to custody tokenized securities, settle them atomically against stablecoins, and underwrite tokenized IPOs and secondary offerings inside its own ATS. This was a big milestone for Securitize, as it closed the regulatory gap that had previously been tZERO’s unique advantage.

For Securitize, the dispute comes at a significant moment. If it is found to have infringed on the patents, that could potentially expose the company to damages, licensing obligations, or modifications to key infrastructure products, affecting both operating costs and competitive positioning.

But a successful defense could reinforce Securitize’s position as an independent infrastructure leader.

The dispute is currently at an early procedural stage, and the court will determine whether infringement has occurred and whether the asserted patents are valid and enforceable. Importantly, this dispute is more than just a disagreement over intellectual property. It is a contest over who will define the technological standards underpinning regulated tokenized capital markets.

No matter which party succeeds, the outcome will set a precedent that could ripple across the entire tokenization industry.

Conclusion

The tokenization industry is entering a new phase of maturity, as evidenced by capital flows and the entry of traditional financial institutions. But an even bigger indication of this is the dispute between tZERO and Securitize, which shows it’s no longer about blockchain innovation or digital assets, but about who will own the underlying infrastructure that will support the next generation of multi-trillion-dollar capital markets.

Whether tZERO ultimately succeeds in enforcing its patents or Securitize prevails in challenging the allegations, the outcome will likely influence just how tokenization platforms innovate, collaborate, and compete in the years ahead.

More importantly, it may establish an early standard for how intellectual property rights shape the emerging architecture of blockchain-based finance.