Tokenised Securities vs. Crowdinvesting and Subordinated Loans

Short answer

A tokenised security is a transferable security in digital form; in Germany usually an electronic security under section 2(1) eWpG, for example a crypto security. Its public offer is subject to prospectus law: since 5 June 2026 it is prospectus-free below EUR 12m per issuer or offeror over 12 months, and from EUR 100,000 a securities information sheet is then generally mandatory (Art. 3(2) Prospectus Regulation, section 4 WpPG). Subordinated loans, by contrast, are investment products under section 1(2) no. 4 of the German Capital Investment Act (VermAnlG); via crowdinvesting platforms they are prospectus-free up to EUR 6m under section 2a VermAnlG if the platform checks individual investment thresholds (base amount EUR 1,000 per investor and issuer). European crowdfunding service providers under the ECSP Regulation (EU) 2020/1503 may broker offers up to EUR 5m over 12 months per project owner.

At a glance

Tokenised securities: prospectus-free below EUR 12m per issuer or offeror over 12 months; such offers generally require a WIB from EUR 100,000 (Art. 3(2) Prospectus Regulation, section 4 WpPG).
Subordinated loans and profit participation rights via platforms: prospectus exemption up to EUR 6m per issuer over 12 months, VIB instead of sales prospectus (sections 2a, 13 VermAnlG).
Individual thresholds as a condition of the exemption under section 2a(3) VermAnlG: EUR 1,000, with self-disclosure EUR 10,000 or twice monthly net income, at most EUR 25,000.
ECSP Regulation: offers up to EUR 5m per project owner over 12 months, key investment information sheet max. 6 pages, 4 calendar days reflection period for non-sophisticated investors (Arts. 1, 22, 23 Regulation (EU) 2020/1503).

How do tokenised securities, subordinated loans and crowdinvesting differ?

The core difference is the legal form of the investment product. A tokenised security is a transferable security in digital form; in Germany it is usually an electronic security issued by entry in a register under the Electronic Securities Act (eWpG) (section 2(1) eWpG), for example a crypto security. A subordinated loan is a loan agreement with a subordination clause and is classified as an investment product in section 1(2) no. 4 VermAnlG. Crowdinvesting describes the distribution channel via an internet platform and can concern both product types.

In Germany there are two regimes for crowdinvesting. The national regime of section 2a VermAnlG exempts investment products such as subordinated loans, profit-participating loans and profit participation rights from the prospectus requirement if they are brokered via an internet service platform. The European regime of the ECSP Regulation (EU) 2020/1503 applies to authorised crowdfunding service providers; the VermAnlG does not apply to their offers up to the EUR 5m threshold (section 1(1) sentence 2 VermAnlG).

Comparison table

Feature	Tokenised security (eWpG)	Subordinated loan (VermAnlG)	Crowdfunding under ECSP Regulation
Legal form	security, e.g. bearer bond, Genussschein, registered share	loan agreement with subordination, investment product (section 1(2) no. 4 VermAnlG)	transferable securities, admitted instruments or loans (Art. 2 Regulation (EU) 2020/1503)
Regulation	Prospectus Regulation, WpPG, eWpG, WpHG	VermAnlG	Regulation (EU) 2020/1503, authorisation of the provider
Offering document	prospectus from EUR 12m per issuer or offeror over 12 months; below that generally WIB from EUR 100,000, max. 4 pages for electronic and digital securities (section 4(3a) WpPG)	sales prospectus (section 6 VermAnlG); under section 2a only VIB, max. 3 pages (section 13(3) VermAnlG)	key investment information sheet, max. 6 A4 pages (Art. 23(7))
Ceiling	no ceiling; prospectus from EUR 12m over 12 months	EUR 6m per issuer over 12 months for the exemption under section 2a(1)	EUR 5m per project owner over 12 months, including prospectus-free offers under Art. 3(2) Prospectus Regulation (Art. 1(2)(c))
Investor protection	WIB with warning, liability under sections 11, 15 WpPG; appropriateness test when brokered (section 63(10) WpHG)	individual thresholds as a condition of the exemption, base amount EUR 1,000 (section 2a(3) VermAnlG)	knowledge test, loss simulation; above EUR 1,000 or 5% of net worth (whichever is higher) risk warning, explicit consent and proof of understanding; 4-day reflection period (Arts. 21, 22)
Transferability	transferable; transfer in the electronic securities register (section 4(8) eWpG)	by assignment (section 398 BGB), unless excluded by contract (section 399 BGB); trading is usually not intended	depends on the instrument
Register	central register or crypto securities register (section 4(1) eWpG)	no securities register	no dedicated register required

Which rules apply to crowdinvesting with subordinated loans?

Under section 2a(1) VermAnlG, the sales prospectus requirement, among others, does not apply to subordinated loans, profit-participating loans, profit participation rights and certain other investments if the sales price of all investment products of the same issuer offered within 12 months does not exceed EUR 6m. Under section 2a(3) VermAnlG, the exemption only applies if the investment products are distributed exclusively via an internet service platform through investment advice or brokerage. Instead of a sales prospectus, an investment product information sheet (VIB) must be prepared, filed with BaFin and published only after BaFin's permission (section 13(1) and (2) VermAnlG).

Under section 2a(3) VermAnlG, the platform must check that an investor does not acquire more than EUR 1,000 per issuer; this checking obligation is a condition of the exemption. With self-disclosure of freely available assets in the form of bank deposits and financial instruments of at least EUR 100,000, up to EUR 10,000 is possible, or alternatively twice the average monthly net income, at most EUR 25,000 (section 2a(3) sentence 1 VermAnlG). These amounts do not apply to investors that are corporations or certain GmbH & Co. KGs (section 2a(3) sentence 2 VermAnlG). Investment services firms brokering such investment products must obtain the self-disclosure and check the thresholds (section 65 WpHG). If there are significant conflicts of interest between issuer and platform operator, the offer is not permitted (section 2a(5) VermAnlG).

The ECSP Regulation (EU) 2020/1503 regulates crowdfunding service providers EU-wide. It does not apply to offers above EUR 5m per project owner over 12 months; this amount also includes the project owner's prospectus-free public offers under Art. 3(2) Prospectus Regulation (Art. 1(2)(c)). For non-sophisticated investors it provides for a knowledge test and a simulation of the ability to bear losses (Art. 21). If an investment exceeds EUR 1,000 or 5% of net worth, whichever is higher, the investor receives a risk warning, must give explicit consent and must demonstrate that they understand the investment and its risks (Art. 21(7)). In addition, there is a pre-contractual reflection period of four calendar days (Art. 22(3)). A key investment information sheet of no more than six A4 pages must be provided per offer (Art. 23(7)).

Which rules apply to tokenised securities?

Prospectus law applies to the public offer of tokenised securities. Since 5 June 2026, offers with an aggregated total consideration of less than EUR 12m per issuer or offeror over 12 months are prospectus-free, provided they are not subject to notification under Art. 25 Prospectus Regulation (Art. 3(2) Prospectus Regulation as amended by Regulation (EU) 2024/2809). In Germany, subject to the exemptions in section 4(1) sentence 2 WpPG, the offeror must then generally prepare a securities information sheet for such offers from EUR 100,000 over 12 months, file it with BaFin and publish it after BaFin's permission (section 4(1) and (2) WpPG). BaFin decides within 10 working days of complete receipt.

Unlike investment products under section 2a VermAnlG, the WpPG has no longer contained individual investment thresholds since 10 February 2026, because section 6 WpPG was repealed by the Location Promotion Act (BGBl. 2026 I No. 33). Crypto securities are generally transferable securities and therefore financial instruments; in that case MiCAR does not apply (Art. 2(4)(a) MiCAR). Operating the crypto securities register generally requires a licence (section 32(1) in conjunction with section 1(1a) sentence 2 no. 8 KWG; exemptions include section 32(1f) KWG).

When does which model fit?

Tokenised security: for volumes also above EUR 6m, for issuers who want a transferable security with a register entry, and where individual thresholds would limit placement. From EUR 12m over 12 months, a prospectus is required.
Subordinated loan under section 2a VermAnlG: for smaller financings up to EUR 6m, where a loan agreement without security status suffices and many retail investors are addressed with amounts within the individual thresholds.
Crowdfunding under the ECSP Regulation: for project owners up to EUR 5m over 12 months who want to raise capital across borders via an authorised European provider.

For investors, the following applies to all three models: there is issuer risk up to total loss, and the investment is often only tradable to a limited extent (liquidity risk). With subordination, investors are served in insolvency only after other creditors (section 39(2) InsO).

Where does heartstocks fit in?

heartstocks is a B2B partner for the digital issuance and settlement of alternative capital market products as tokenised securities under the eWpG, KAGB and AktG. heartstocks, active in the market in Hamburg since 2021, has according to its own figures (as of 2026) structured more than EUR 200m in volume and completed more than 5 regulatory approval processes (securities prospectus or subscription documents). For issuances with heartstocks, the subscription documents are prepared and submitted to BaFin; heartstocks steers the filing of the WIB or the approval of a prospectus with BaFin on behalf of the issuer.

Unlike crowdinvesting via a third-party platform, investors subscribe directly with the issuer, on the issuer's own platform under its own brand, which runs on heartstocks' infrastructure. After digital onboarding with video identification, they pay by SEPA transfer in euros, without a wallet; the holding is recorded in the eWpG register, and the tokens are issued in the Nyala register and held in custody via Tangany. heartstocks provides investment brokerage as a tied agent under section 3(2) WpIG exclusively for the account and under the liability of CONCEDUS GmbH, Nuremberg.

This article provides general information and does not replace legal or investment advice.

More at heartstocks: How investors subscribe Platform under your own brand Prospectus duty and WIB 2026

Frequently asked questions

Is a subordinated loan a security?

No. Under section 1(2) no. 4 VermAnlG, a subordinated loan is an investment product and not a security. It is created by contract, not entered in a securities register, and for a public offer in Germany is generally governed by the VermAnlG instead of securities prospectus law. An exception applies to offers by a crowdfunding service provider authorised under the ECSP Regulation up to the EUR 5m threshold; the VermAnlG does not apply to them (section 1(1) sentence 2 VermAnlG).

Up to what amount is crowdinvesting possible without a sales prospectus?

For investment products via an internet service platform, the section 2a VermAnlG exemption applies up to EUR 6m per issuer over 12 months. For offers via a provider authorised under the ECSP Regulation, the limit is EUR 5m per project owner over 12 months. Tokenised securities are prospectus-free below EUR 12m per issuer or offeror over 12 months but in Germany then generally need a WIB from EUR 100,000.

Do individual investment thresholds apply to tokenised securities as in crowdinvesting?

Since 10 February 2026, the WpPG no longer contains individual thresholds, because section 6 WpPG was repealed. For investment products under section 2a VermAnlG, the thresholds of EUR 1,000, 10,000 or at most 25,000 per investor remain a condition of the exemption. Whether distribution obligations follow from other provisions must be checked in each individual case.

Does MiCAR apply to tokenised securities?

As a rule, no. Crypto securities are generally transferable securities and therefore financial instruments; in that case MiCAR does not apply (Art. 2(4)(a) MiCAR). The Prospectus Regulation, WpPG and WpHG apply to them.

Where do investors subscribe in an issuance with heartstocks?

Investors subscribe directly with the issuer, on the issuer's own platform under its own brand, which runs on heartstocks' infrastructure. Payment is made by SEPA transfer in euros; no wallet is needed. The holding is recorded in the eWpG register and visible in the investor dashboard.