Legal Nature, Security and Regulatory Mechanisms of Tokenization

Tokenization has emerged as one of the most transformative mechanisms in the modern digital economy, enabling the representation of property rights and assets through digital tokens recorded on blockchain networks. This article explores the legal nature, security dimensions, and regulatory mechanisms of tokenization from a comparative and interdisciplinary perspective. It analyzes tokenization as a hybrid legal construct that combines elements of traditional property law, securities regulation, and smart contract technology. Drawing on the works of leading scholars such as Kevin Werbach, Primavera De Filippi, and Philipp Paech, the article demonstrates that tokens function not merely as technical instruments but as legally significant representations of rights and obligations. Particular attention is paid to security risks arising from smart contract vulnerabilities, regulatory gaps, anonymity, and market manipulation, illustrated by the DAO hack and other high-profile incidents. The study further examines technological, organizational, and legal protection mechanisms, including audits, multisignature wallets, KYC/AML procedures, and insurance models.