All termsOwnership and Legal StructureWorth knowing
Bankruptcy Remoteness
Bankruptcy remoteness refers to a legal structure designed to reduce the likelihood that assets held for investors become part of another company's bankruptcy proceedings. An SPV or similar structure may be used to separate particular assets from the wider business activities and liabilities of an originator or sponsor.
Why it matters to you
If the company behind a tokenized product fails, investors need to know whether the underlying assets are legally separated from that company's creditors. A bankruptcy remote structure may provide additional separation, but it does not mean an investment is completely protected from every insolvency or legal risk.
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