Understanding how your assets are protected, the legal structure behind tokenized stocks, and the risks involved.
Tokenized stocks on Replica are issued by regulated entities. Each tokenized stock is a debt instrument (structured note) backed 1:1 by the corresponding underlying security held with regulated custodians.
Replica Finance operates as a technology layer that provides access to tokenized stocks. Replica does not custody user assets — users hold tokenized stocks directly in their non-custodial wallets.
Tokenized stocks on Replica are currently issued by Ondo Finance. Additional regulated issuers are planned.
Replica is a distribution and portfolio management layer. We provide the interface, portfolio curation, and copy-trading functionality. The underlying tokens are issued and managed by regulated providers. Replica does not hold or custody user funds.
The shares backing tokenized stocks are held with regulated custodian banks:
Assets are segregated from the issuer's operating accounts.
The issuer provides regular attestations of reserves. The backing of each tokenized stock can be verified on-chain and through the issuer's transparency reports.
Tokenized stocks are backed 1:1 by the underlying securities. Additional reserves may be held as a buffer, but the primary structure is full 1:1 backing.
Yes. You can redeem your tokenized stocks at any time for their current market value. The redemption process:
In extreme market conditions, there may be temporary delays, but the 1:1 backing ensures your tokenized stocks maintain their fundamental value.
Tokenized stocks are designed to be bankruptcy-remote. The underlying assets are held in segregated custody accounts with regulated banks. In the event of issuer insolvency:
However, this is not equivalent to government deposit insurance. Investors should understand that risks exist, including operational, regulatory, and counterparty risks.
Your tokenized stocks are held in your non-custodial wallet, not by Replica. If Replica ceases operations:
This is a key benefit of non-custodial architecture.
Tokenized stocks are not insured by government deposit insurance (such as FDIC in the US, FSCS in the UK, or similar schemes). This is a fundamental difference from traditional bank deposits or brokerage accounts.
However, structural protections exist:
These protections reduce but do not eliminate risk. Investors should understand they bear counterparty, operational, and regulatory risks.
Dividends and corporate actions are reflected in the token value. You receive the economic benefit without needing to take any action.
This structure simplifies administration while preserving full economic exposure to the underlying security.
| Risk Type | Description |
|---|---|
| Market risk | Token value moves with underlying stock price |
| Counterparty risk | Token issuer risk |
| Regulatory risk | Changes in securities law or crypto regulation |
| Smart contract risk | Potential vulnerabilities in token contracts |
| Liquidity risk | Redemption delays in extreme market conditions |
Tokenized stocks are structured as debt instruments (notes) that provide economic exposure to underlying securities. They are offered under Regulation S exemptions and are not registered with the SEC. Tokenized stocks are not available to US persons.
Tokenized stocks are prohibited for persons in:
Persons in certain restricted jurisdictions (Brazil, EEA, Hong Kong, Malaysia, Singapore, Switzerland, UK) may access them only if they meet accredited/professional investor requirements.
Eligibility is verified during onboarding. See our Restricted Jurisdictions page for details.
All users must complete identity verification (KYC) before accessing tokenized stocks. This includes:
We work with regulated compliance providers to ensure adherence to anti-money laundering requirements.
Tokenized stocks are transferable on-chain, subject to restrictions. Transfers to wallets in restricted jurisdictions are prohibited under our Terms of Service. We employ monitoring to detect and prevent prohibited transfers.
Tokenized stocks used on Replica are deployed on Solana, offering fast transactions and low fees.
The token issuer's smart contracts have been audited by independent security firms. Audit reports are available in the issuer's documentation.
Audit status and reports will be published when available.
Replica creates a non-custodial wallet for you during signup, secured by your Google account. You don't need to manage seed phrases or install external wallet software.
Your assets are held in a non-custodial wallet linked to your account credentials. If you lose access:
Because assets exist on the blockchain, they cannot be lost due to platform issues—only access can be temporarily interrupted.
| Report Type | Frequency | Content |
|---|---|---|
| Portfolio value | Real-time | Current holdings and performance |
| Transaction history | On-demand | All buys, sells, rebalances |
| Backing verification | Via Ondo Finance | Proof of reserves |
You can verify tokenized stock backing through:
Review our full legal documentation or reach out to our team.