Tokenized SPVs Add Operational Risk

The core issue is that tokenizing an SPV often creates a second claim on top of an already indirect claim, which makes ownership, custody, transfer rules, and failure points harder to track rather than easier. In this market, investors already buy through wrappers, fund admins, brokerages, and issuer approvals. Adding a token on top can mean more counterparties, more legal uncertainty, and more ways for pricing and settlement to break away from the underlying asset.

• Monark’s model is built around plugging private assets into existing brokerage and clearing workflows, where money moves from an existing brokerage account into an SPV or fund and, in some cases, the position is custodied and reported by the clearing firm. That system is designed to compress operational risk, not add another wrapper above it.
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• A second concern is market structure. In private secondaries, liquidity is already constrained by issuer approvals, SPV limits, and fragmented supply. EquityZen describes too many intermediaries as the main bottleneck. A tokenized SPV can add one more intermediary layer between buyer and underlying shares, which can further blur price discovery and ownership rights.
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• The market has also not shown real scale for tokenized private stock so far. Monark points to Robinhood’s earlier Europe tokenization effort and Republic’s similar US approach as products that drew regulatory questions and mixed adoption, while both Monark and EquityZen have stayed focused on more conventional structures when client money is involved.
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The next step for private markets is likely more standardization inside the existing brokerage, clearing, and issuer approved stack, not more synthetic layers on top of it. As investor caps loosen and private positions become easier to custody, report, and trade inside familiar accounts, the winning products should look more like boring market plumbing and less like crypto wrappers.