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Key Takeaways
- Securitize filed suit in U.S. District Court in Delaware seeking a declaratory judgment of non-infringement after tZERO sent a cease-and-desist letter targeting its DS Protocol and Vault Registrar products.
- tZERO, which holds 105 patents across 23 patent families, says its investigation has identified potential infringement by at least six additional firms across tokenization, institutional crypto, and DeFi.
- The dispute lands as major institutions including BlackRock, JPMorgan, Nasdaq, and NYSE have entered the tokenized asset space, raising the commercial stakes of underlying IP.
Securitize filed suit in U.S. federal court Monday seeking a declaratory judgment that it does not infringe patents held by rival tokenization firm tZERO, escalating a dispute that began when tZERO sent Securitize a cease-and-desist letter the previous week accusing the company of violating several patents related to blockchain-based securities infrastructure.
tZERO Targets Securitize’s DS Protocol and Vault Registrar Products
At the center of the dispute are patents covering compliance systems for tokenized securities, digital asset issuance and redemption technology, and blockchain-based trading infrastructure. tZERO said its investigation concluded that Securitize’s DS Protocol and Vault Registrar products infringe patents covering self-enforcing compliance controls for security tokens and crypto integration systems.
The company added that it is also investigating potential infringement by at least six other firms across tokenization, institutional crypto infrastructure, and decentralized finance. Securitize rejected the claims outright. The company said in a statement posted on X:
“In light of tZERO’s allegations of patent infringement, today we filed a complaint in the U.S. District Court for the District of Delaware seeking a declaratory judgment confirming that we do not infringe. 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. 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 filed its lawsuit in the U.S. District Court in Delaware.
Both Companies Have Deep Roots in Regulated Digital Asset Markets
The dispute pits two early builders of the tokenized securities market against each other. tZERO launched in 2014 and says it holds 105 patents across 23 patent families covering blockchain-based capital markets infrastructure. Intercontinental Exchange, the parent company of NYSE, invested in tZERO in 2022, and tZERO unveiled plans last year to go public.
Securitize, founded in 2017, has built infrastructure for tokenized funds and securities in partnership with firms including BlackRock, Apollo, KKR, Hamilton Lane, and VanEck. Earlier this year, the company announced a deal with the New York Stock Exchange to develop infrastructure for tokenized equities trading. Securitize aims to go public later this year through a merger with a Cantor-backed entity.
Global Banks and Exchanges Have Expanded Into Tokenized Assets
The lawsuit arrives as global banks, exchanges, and asset managers have moved into tokenization, raising the commercial stakes of the underlying IP. BlackRock, JPMorgan, Nasdaq, and NYSE are among the institutions that have entered the space.
Citi has estimated tokenized assets could reach a $5 trillion market capitalization by 2030, while a report from Boston Consulting Group and Ripple projected a market worth $18.9 trillion by 2033.
tZERO Investigation Extends to at Least Six Additional Firms
tZERO’s cease-and-desist and Securitize’s subsequent federal filing mark a public IP dispute between two of the sector’s early companies. tZERO said its investigation has identified potential infringement by at least six additional firms across tokenization, institutional crypto infrastructure, and decentralized finance, and that investigation is ongoing.
