Quick answer: tokenising private equity or venture capital in Spain means representing, through distributed ledger technology, the units of a venture capital fund (FCR) or the shares of a venture capital company (SCR). Those holdings are financial instruments and, therefore, their tokenisation is governed by securities markets law —Directive 2014/65/EU (MiFID II) and Law 6/2023 (LMVSI, BOE-A-2023-7053)— combined with Law 22/2014, which regulates venture capital entities. MiCA does not apply to these assets, because it excludes from its scope crypto-assets that are financial instruments (Regulation (EU) 2023/1114, Art. 2.4). In the primary market, representation on a blockchain requires an entity responsible for registration and recording (ERIR). Tokenisation brings fractionalisation, more agile distribution and, with caveats, a potential secondary market; but it does not remove marketing limits: these products remain aimed, as a general rule, at professional or accredited investors.
What is tokenised: the units of an FCR or an SCR
Venture capital in Spain is channelled through venture capital entities (ECR), regulated by Law 22/2014 of 12 November, which regulates venture capital entities and other closed-ended collective investment undertakings (BOE-A-2014-11714). These entities may take two legal forms: the venture capital fund (FCR), which has no legal personality and is divided into units, and the venture capital company (SCR), which is a public limited company whose capital is divided into shares. The designations FCR, SCR and SGEIC (management company of closed-ended collective investment entities) are reserved by law to entities incorporated under that law and registered in the administrative registry maintained by the CNMV (Law 22/2014, Art. 9 and related provisions).
What is tokenised, therefore, is not the underlying portfolio asset (the companies the fund invests in) but the investor's own right: the FCR unit or the SCR share. That holding is a financial instrument, and tokenisation merely changes the medium in which it is represented, from the traditional book entry to a distributed ledger.
The applicable framework: MiFID II, LMVSI and venture capital law
The anchor rule is clear: because an FCR unit or an SCR share is a financial instrument, its tokenisation falls under MiFID II (Directive 2014/65/EU) and its Spanish development, Law 6/2023 (LMVSI). MiCA is excluded by the express carve-out in its Article 2.4 (Regulation (EU) 2023/1114). On top of that securities markets layer sits the sector-specific venture capital regime (Law 22/2014), which continues to govern the formation of the vehicle, its management by an SGEIC, the investment and diversification rules, and the marketing limits.
In other words, tokenisation neither creates a new regime nor relaxes the existing one: it overlays a technological layer (representation on DLT, covered by the LMVSI) on a product that remains fully subject to its sector-specific rules. The tokenised vehicle must comply with both the obligations of Law 22/2014 and those of the LMVSI.
The role of the ERIR
The piece that makes representation on a blockchain legally possible is the entity responsible for registration and recording (ERIR), a figure introduced by the LMVSI. The ERIR is the entity in charge of registering and recording transferable securities represented through DLT, and it is liable to those harmed by the failure to carry out registration, by inaccuracies and delays, and in general by the wilful or negligent breach of its legal obligations (Law 6/2023, ERIR regime).
When financial instruments are issued in the primary market, the ERIR must be an entity authorised to custody financial instruments in Spain —a credit institution, an investment firm or a securities agency—. Its function is not to validate the merit of the fund, but to verify that, when represented on a blockchain, legal certainty, technical integrity and operational continuity of the register are preserved. We address this figure in detail, together with the method for tokenising an investment vehicle, in our guide on how to tokenise an investment fund in Spain, and the full legal basis in our analysis of Law 6/2023 (LMVSI) and tokenisation.
Advantages of tokenising venture capital
Private equity and venture capital have traditionally been illiquid assets, with high tickets and closed distribution. Tokenisation does not change their nature, but it does improve specific operational aspects:
- Fractionalisation: representing the holding in digital units allows, within the applicable legal minimums, the effective size of the position to be reduced and the base of eligible investors to be broadened.
- More agile distribution and administration: subscription, the register of holders and the management of investor information are simplified by relying on a single, programmable register.
- Potential secondary market (with caveats): tokenisation technically facilitates transfer, and the emergence of infrastructures such as the DLT-based trading and settlement systems (DLT-TSS) of the DLT Pilot Regime (Regulation (EU) 2022/858) opens the door to secondary liquidity that was previously almost non-existent. However, that liquidity remains conditioned by the product's marketing limits and by the thresholds of the pilot regime itself.
Limits: who it can be marketed to
Tokenisation does not lift the marketing restrictions on venture capital. As a general rule, venture capital entities are aimed at professional investors within the meaning of securities markets law. Law 22/2014 regulates marketing to non-professional investors with specific safeguards, setting conditions such as minimum investment amounts and reinforced information requirements (Law 22/2014, marketing regime). The technological medium does not alter that classification: a token representing an FCR unit remains subject to the same suitability, appropriateness and investor eligibility rules as the non-tokenised unit.
This is why it is a frequent mistake to present the tokenisation of venture capital as a way to open these products indiscriminately to the retail public. What improves is operational efficiency and, potentially, access for investors who are already eligible; what does not change is the product's risk profile or the safeguards the law imposes to protect it.
Frequently asked questions
Does tokenising an FCR turn it into a crypto-asset regulated by MiCA?
No. An FCR unit is a financial instrument, and MiCA expressly excludes from its scope crypto-assets that are financial instruments (Regulation (EU) 2023/1114, Art. 2.4). Securities markets law (MiFID II, LMVSI) and venture capital law (Law 22/2014) apply.
Can any investor buy tokenised venture capital holdings?
Not as a general rule. These products are aimed mainly at professional or accredited investors. Marketing to non-professional investors is subject to specific conditions, such as minimum investment amounts and information requirements (Law 22/2014).
What does the ERIR contribute to a venture capital tokenisation?
The ERIR is the entity responsible for registering and recording securities represented on DLT. It guarantees the legal certainty of the register and is liable for inaccuracies, delays or breaches in performing its function. It must be an entity authorised to custody financial instruments.
Is there a secondary market for tokenised venture capital holdings?
There can be, with caveats. Tokenisation facilitates transfer, and the DLT Pilot Regime (Regulation (EU) 2022/858) allows DLT-based trading and settlement infrastructures. But liquidity remains limited by the product's marketing rules and by the pilot regime's thresholds.
What this means for you
If you manage or promote a venture capital vehicle, tokenisation offers a regulated route to modernise the distribution and recording of holdings, and to prepare the ground for potential secondary liquidity. The starting point is twofold: complying with Law 22/2014 in the formation and management of the vehicle, and arranging the representation on DLT through an ERIR in accordance with the LMVSI.
If you are an investor, it is worth remembering that the “tokenised” label does not lower the risk or turn a professional product into a retail one. Before investing, verify your classification as an investor, the marketing conditions and the identity of the manager and the ERIR.
This content is for general information and educational purposes only. It does not constitute legal, tax or investment advice. Venture capital and securities markets law evolve, and their application depends on the specific circumstances of each vehicle and each investor. Before making any decision, consult a professional adviser.
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