Walkers supports Robinhood’s asset tokenisation project

Walkers, a prominent law firm, has advised Robinhood on an innovative real-world asset (RWA) tokenisation project. This initiative represents a significant move towards integrating blockchain structures with traditional financial assets. The firm assisted Robinhood in setting up a Jersey issuer, which is an indirect subsidiary of Robinhood Markets, Inc. This issuer will be responsible for issuing debt security tokens designed to give investors exposure to the performance of underlying equities, exchange-traded products (ETPs), and similar assets.

These tokens are crafted as debt securities, providing a security interest over the underlying assets, which are monitored daily by the issuer and verified regularly by an independent third-party verification agent. After the issuance, these tokens can be transferred among investors on blockchain infrastructure. Participants who wish to redeem directly with the issuer must adhere to Jersey’s anti-money laundering framework before redemption.

Walkers' role in this transaction involved advising on the regulatory and legal framework associated with Jersey, engaging with the Jersey Financial Services Commission about the proposed structure, and preparing and submitting relevant regulatory applications. Dilmun Leach, an Investment Funds & Corporate partner at Walkers, expressed satisfaction with the collaboration, stating, '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, a partner in Regulatory & Risk Advisory, highlighted the complexities involved in the regulatory analysis necessary for this structure, noting, '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.'

The Walkers team on this project was extensive, with contributions from various partners and senior counsel specialising in multiple areas. The team was led by Dilmun Leach, supported closely by Gemma Palmer and James Lydeard, along with senior counsel Sarah Townsend. Further support came from experts in regulatory and risk advisory across different jurisdictions, ensuring a well-rounded approach to the project. The firm collaborated with onshore counsel Simmons & Simmons and maintained a close relationship with Cavendish Fiduciary (Jersey) Limited, which acted as the corporate services provider for the Jersey issuer.