Tokenized pre IPO shares emerged as one of the most debated themes at Consensus Hong Kong 2026, where industry leaders clashed over the legal and structural foundations of blockchain based exposure to private companies. The discussion centered on whether creating on chain instruments linked to elite private firms expands investor access or creates regulatory and legal vulnerabilities that could undermine trust in the broader tokenization movement.
Ultan Miller, chief executive of Hecto Finance, presented a vision for what he described as the world’s first tokenized pre IPO company index. The proposed product would offer blockchain based exposure to high valuation private firms that typically remain inaccessible to public investors until a formal listing. According to Miller, the index is being developed on an institutional grade blockchain network designed to support privacy controls, compliance features and programmable settlement functionality that align with traditional financial standards.
The concept aims to provide diversified exposure through a single token representing a basket of private companies with valuations exceeding one hundred billion dollars. Investors would deposit capital into a vault structure and receive proportional tokens linked to the aggregate performance of the underlying basket. Governance token holders would participate in decisions about index composition, and proceeds from liquidity events such as IPOs could be used to buy back tokens.
Supporters argue that such structures could broaden access to private market growth at a time when companies remain private longer and accumulate substantial value before listing. They see tokenization as a technological bridge connecting traditional securities with blockchain infrastructure, potentially modernizing recordkeeping, settlement and distribution.
However, critics at the conference raised concerns about issuer consent and investor protection. Edwin Mata, chief executive of tokenization platform Brickken, warned that tokenizing company shares or equity linked exposure without direct authorization from the issuing companies could create legal uncertainty. He emphasized that blockchain technology does not alter the legal nature of securities, which remain governed by corporate law and regulatory frameworks.
The debate reflects broader tensions within the digital asset sector. In 2025, a high profile dispute arose when tokenized instruments referencing private companies were launched without formal endorsement from the underlying firms. The episode highlighted confusion around what investors were actually purchasing and whether such tokens represented enforceable equity rights.
Legal experts note that while tokenization can improve efficiency, it does not automatically create liquidity or regulatory clarity. Compliant secondary markets, proper disclosures, clear governance rights and alignment with securities laws remain essential components. Without these safeguards, investors may face uncertainty around voting rights, dividends and transferability.
At Consensus Hong Kong 2026, the exchange of views underscored that tokenized private equity is advancing faster than global regulatory harmonization. As forecasts suggest real world asset tokenization could reach multi trillion dollar scale in the coming years, the sector now faces the challenge of balancing innovation with legal integrity and investor protection.
