Litigation Funding Case Study: Tokenised Claim

What does a tokenised litigation claim actually look like from the moment a case is filed to the moment investors receive proceeds? This litigation funding case study walks through every stage — structuring, issuance, monitoring, and settlement — on the Investhub platform.

Why This Litigation Funding Case Study Matters to Issuers

Most capital-raising founders understand equity rounds and debt instruments. Litigation finance sits in a different category: the underlying asset is a legal claim with a binary or tiered payout profile, a defined litigation timeline, and no correlation to equity markets. For an SME CFO, that non-correlation is attractive — but the structural complexity can be a barrier. This case study exists to remove that barrier. We trace a hypothetical but structurally realistic commercial dispute claim through the full Investhub workflow: from initial due diligence and TVTG-compliant token issuance in Liechtenstein, through investor onboarding and secondary bulletin-board trading, to stablecoin-denominated settlement once the case resolves. Every step is grounded in the actual regulatory and technical architecture Investhub uses today. Risk disclosures are woven in throughout, because informed investors are better long-term partners.

Stage 1 — Structuring the Claim as a Tokenisable Asset

Before any token is minted, the claim must be structured as a legally recognisable asset capable of being held, transferred, and pledged. Under Liechtenstein's Token and Trusted Technology Service Provider Act (TVTG), a token can represent a contractual right to proceeds from a defined legal claim. The issuer — typically a special-purpose vehicle (SPV) holding the claim or a funding agreement — works with Investhub's compliance team to produce the Token Information Document (TID), mapping cash-flow waterfalls, litigation milestones, and investor-protection provisions. At this stage, honest risk assessment is non-negotiable: claim strength, opposing-party solvency, jurisdiction enforceability, and adverse-cost exposure are all documented. Investors who later review the TID on litigation-financing.ai receive a clear, unvarnished picture of probability-weighted outcomes — not a marketing brochure.

Stage 2 — Compliant Token Issuance on Investhub

With the TID finalised and the SPV registered, Investhub issues the claim tokens on its Liechtenstein-regulated infrastructure. TVTG registration ensures each token carries enforceable legal status: it is not merely a database entry but a regulated instrument recognised under Liechtenstein and, by EEA passporting logic, across the broader European regulatory perimeter. Issuers choose denomination (typically stablecoin-pegged units to eliminate FX noise), supply cap, and transfer restrictions. KYC/AML onboarding for investors is handled within the platform, reducing issuer administrative burden significantly. Accredited and institutional investors can subscribe directly; the platform supports tiered access so that the issuer can gate retail participation where local regulation requires. Throughout this stage, Investhub's compliance layer — not the issuer's in-house team — manages the regulatory heavy lifting. That is a material cost saving for an SME raising sub-€5 million.

Stage 3 — Investor Onboarding and the Secondary Bulletin Board

Liquidity is the perennial challenge in litigation finance: cases can run for years, and early investors naturally want optionality. Investhub addresses this through its secondary bulletin board, a regulated peer-to-peer matching facility that allows token holders to post bids and offers without requiring a full secondary-market licence for the issuer. This is not a guarantee of liquidity — litigation timelines are inherently uncertain, and the pool of buyers for a niche legal claim is smaller than for a corporate bond — but it provides a meaningful mechanism that pure private-placement structures lack entirely. Investors are onboarded with the same KYC/AML rigour applied at primary issuance. The bulletin board also creates a transparent, time-stamped price-discovery record, which can be valuable if the issuer later needs to report fair value to auditors or regulators.

Stage 4 — Monitoring Milestones and Managing Investor Communication

Active litigation is not a passive asset. Court dates shift, settlement negotiations open and close, adverse rulings can materially change case value overnight. Investhub's dashboard allows issuers to push milestone updates directly to token holders — procedural hearings, expert-report submissions, settlement discussions (to the extent disclosable) — creating an auditable communication trail. This matters for two reasons. First, securities regulations in most jurisdictions impose ongoing disclosure obligations once an instrument is sold to investors; the platform operationalises that obligation without requiring the issuer to build a bespoke investor-relations infrastructure. Second, informed investors are less likely to panic-sell on the bulletin board at distressed prices during normal litigation volatility, protecting the issuer's funding relationship. Milestone tracking is also integrated with litigation-financing.ai, which provides AI-assisted case-progress analytics to help issuers and their legal teams benchmark developments against comparable proceedings.

Stage 5 — Settlement, Enforcement, and Stablecoin Payout

When the case resolves — by judgment, arbitral award, or negotiated settlement — proceeds flow into the SPV. Investhub's smart-contract layer then distributes funds to token holders according to the waterfall encoded at issuance: litigation funder's priority return, then issuer recoupment, then investor pro-rata share, with any residual reverting to the claimant. Payout is denominated in stablecoin, eliminating the settlement-date FX risk that can erode returns in cross-border proceedings. The entire distribution is recorded on-chain, giving every investor — and every auditor — an immutable, timestamped proof of payment. For an issuer, this removes reconciliation risk: there is no spreadsheet to maintain, no wire-transfer confirmation chase. The smart contract is the back office. It is worth noting that not all cases resolve favourably; loss scenarios are addressed explicitly in the TID, and investors' downside is capped at their invested capital.

Key Takeaways for CFOs and Capital-Raising Founders

This litigation funding case study illustrates that tokenisation does not change the underlying economics of legal-claim financing — it changes the operational and regulatory infrastructure around it, meaningfully for the better. Issuers gain access to a broader investor base, a compliance framework they do not have to build themselves, and a transparent settlement mechanism that reduces post-resolution friction. Investors gain regulated instruments, secondary-market optionality, and real-time milestone visibility. The risks remain — litigation is inherently uncertain, and capital can be lost — but the information asymmetry that has historically made litigation finance opaque to non-specialist investors is substantially reduced. For a CFO evaluating alternative capital sources, that combination of non-correlated yield potential and institutional-grade compliance infrastructure is the proposition worth examining. Investhub and litigation-financing.ai together provide the end-to-end stack to make it operational.

Tokenising a litigation claim does not eliminate legal or commercial risk — no structure can. What it does is remove the operational opacity that has historically kept institutional-quality litigation finance out of reach for SME issuers and non-specialist investors. Investhub and litigation-financing.ai together provide the regulatory infrastructure, compliance workflow, and settlement mechanics to make this asset class practical. If you are a CFO or founder evaluating alternative capital structures, we invite you to explore whether a tokenised claim offering fits your situation. Start with a no-obligation eligibility conversation with the Investhub team.