Interview: Private equity is broken, and tokenization can fix it: Fairmint CEO

Joris Delanoue, CEO and co-founder of Fairmint, explains why private equity needs a tech upgrade.

As asset tokenization picks up momentum across real estate, debt, and treasuries, one segment remains largely untapped: equity. Still, despite its complexity, this market has significant potential, especially in the private equity space.

To discuss tokenization in private equity, crypto.news spoke to Joris Delanoue, CEO and co-founder of Fairmint. He explained the transformative potential of this technology, as well as outlined proposals for making markets work better.

crypto.news: Everyone’s racing to tokenize real-world assets — real estate, debt, treasuries. Why did Fairmint choose to focus specifically on equity?

Joris Delanoue: Tokenization is really just about upgrading from an old system to better technology — replacing traditional databases with distributed ledgers. But the word “tokenization” is very generic. It’s broad. So for us, the real question was: what problem are we solving?

And the answer was clear — illiquidity, especially in private equity markets.

In capital markets, you have two main categories: debt and equity. Within equity, you have public markets — where everything is highly structured — and private markets, where things are still a mess.

The public markets, especially in the U.S., have been evolving since the 1970s. After the paper crisis, the DTCC was created to clean up the system and take it digital. It worked — today, public markets process trillions every day.

But in private markets? Nothing was standardized. Investors can’t really custody their assets. There’s no unified infrastructure. It’s fragmented, manual, and hard to move anything.

That’s where the real friction was — and that’s what we wanted to solve.

Originally, I started working on a solution using SPVs to create liquidity for startups. The cap table of the startup stayed the same, but within the SPV, you could move shares. It offered a workaround to simulate liquidity without touching the issuer’s structure.

Then in 2018, my co-founder Thibault — who’s been deep into blockchain since 2014 — introduced me to the tech side of things. At the time, everyone was talking about ICOs and deregulation. But what I saw was different: blockchain as a superior database — a way to remove intermediaries and rebuild the system on better rails.

We didn’t chase the STO or deregulation trends. For us, it was always about asking: How do we bring these assets — equity — on-chain in a way that’s compliant and functional, even if the laws don’t change?

That’s been our approach from day one. Seven years later, it turns out we were just early — but right.

CN: Let’s talk about regulation. Private equity is subject to a completely different set of rules than public markets. Access is limited, and compliance is strict. How do you approach compliance in this market?

JD: That’s a really good question. And I’ll say this: after seven years in this space, regulation is not just something we react to — it’s something we design around.

When we started Fairmint, one of our first hires was a securities lawyer: Collins Belton. He’s been instrumental. He helped us really understand U.S. securities law, and what we realized early on was that the rules we needed already existed. The U.S. legal framework is actually pretty robust — the key is building within its boundaries.

A lot of companies in crypto tried to change the law or wait for a new legal framework to appear. That’s risky. Instead, we decided to fully embrace the law as it is — and build everything in strict compliance. Sometimes that meant walking away from deals where founders or VCs wanted to cut corners. But long-term, it positioned us to be credible, scalable, and regulatory-first.

Today, I believe we’re one of the best teams in the world at operating at the intersection of traditional finance and blockchain — especially on the private market side.

And this is how I like to frame it: we’re helping shift the system from compliance by intermediation to compliance by automation. That means instead of relying on lawyers and middlemen to enforce the rules, we translate regulations directly into smart contracts — with attributes that govern exactly how assets move.

CN: What kind of rules are you embedding into the smart contracts? Can you give some examples of what “compliance by automation” actually looks like?

JD: Sure. Let’s start with the basics. In private equity, the company is required to know who its shareholders are. So KYC and AML — Know Your Customer and Anti-Money Laundering — are mandatory.

Then, depending on how shares are issued, different exemptions apply under U.S. securities law. For example, if a company raises from accredited investors under Reg D, there are strict requirements — like verifying accreditation status, applying lockup periods (180 days or one year), and so on.

Or if the deal is done under Reg S — an offshore exemption — then the rules change. It applies only to non-U.S. persons, meaning they didn’t invest through a U.S. IP, weren’t physically in the U.S., and have no U.S. tax ties.

Now here’s where it gets interesting: all those exemptions can coexist in the same cap table — but that used to be a nightmare for lawyers. One mistake — sending the wrong document to the wrong investor — could invalidate the entire exemption.

With smart contracts, we can embed all these rules as logic. The contract checks: Are you accredited? Are you in the right jurisdiction? Are you within the lockup period? And only if everything checks green, the transfer happens.

It’s binary. It’s precise. And it’s a huge upgrade from the manual, error-prone world of legacy compliance.

CN: Let’s talk about programmable equity. It’s a buzzword — but what does it actually do? What becomes possible once equity runs on code?

JD: The biggest shift is that ownership becomes native to the internet. Not in a metaphorical way, but in how it’s issued, held, and used.

Historically, owning shares meant having a paper certificate. Then it became a database entry. Now? Most people don’t really “hold” anything — you rely on a cap table software or an admin. And that’s fragile. If the platform shuts down or the company stops paying, you can be left with nothing more than a screenshot.

When equity is programmable and on-chain, it’s yours — in your wallet, under your control, and recognized legally. But more than that, it becomes active. It’s no longer just a static record in a spreadsheet.

You can move it, use it, and respond to events. It can “talk” to other systems, connect to financial infrastructure, and eventually flow into new environments — whether that’s a lending platform, a trading interface, or something we haven’t seen yet.

For the first time, equity isn’t just a claim. It’s an object that behaves. That changes what it means to be a shareholder — you don’t just hold value; you participate in it. And over time, this creates new market behaviors.

Most people still see equity as a dead document. But when it becomes code, it can evolve. Programmable equity isn’t just more efficient. It’s more capable. And that’s what people miss when they reduce tokenization to “digitizing shares.”

This isn’t about faster PDFs. It’s about equity being composable, verifiable, and responsive to the world around it. That changes what companies can do — and what investors can expect.

CN: You’ve made the case that smart contracts are actually more precise than traditional legal workflows — but smart contracts aren’t immune to bugs or hacks. How do you approach smart contract risk, especially given you’re dealing with real securities?

JD: That’s a key point. First, let me say: we’re not doing cryptocurrencies. We’re doing crypto-securities. That’s a fundamentally different framework.

The moment you deal with securities, you’re required to work with regulated agents. That could be a broker-dealer, a transfer agent, or another licensed intermediary — someone who’s liable and accountable. If something goes wrong, the SEC can fine them.

Here’s a concrete example. Let’s say you invest in a private company through our platform. You pass KYC, your money goes in, and you receive your shares in a digital portfolio. But two weeks later, your wallet is compromised. Let’s say a group like Lazarus steals your keys and takes control of your portfolio.

Now, in the crypto world — that’s it. Game over. But in our world, you’re still the legal owner of those shares.

Why? Because one of the primary attributes in the smart contract is your identity. You can go to the regulated transfer agent, prove who you are, re-do your KYC, and they’ll cancel and reissue the shares to a new wallet. Problem solved.

That’s what makes these tokens securities. They’re built for investor protection. The legal claim sits with the person — not the private key alone. It’s a totally different risk model than DeFi or tradable crypto tokens. In our system, the identity is decoupled from the device. That’s part of the compliance layer we built into the contracts.

And because we’re not dealing with pooled liquidity or locked funds in the same way as DeFi, the risks of exploits like flash loan attacks or protocol-level vulnerabilities are much lower. We’re not locking hundreds of millions in a contract. We’re managing ownership, identity, and permissions.

CN: You’ve said from the start that Fairmint builds within the rules — but you also submitted a 7-point proposal to the SEC about modernizing equity markets. What exactly should change in the way the system works?

JD: Yes — this is something I care a lot about. Let me break it down. The proposal is a 7-point framework, but a few points really stand out as critical.

The first one is standardization. The private market is messy. Every deal, every lawyer, every cap table looks different. That chaos creates risk, especially as more assets move on-chain. Standardization is the only way to scale safely.

Funny enough, I was just at a private event in New York with people from the DTCC, and even they’re thinking about this. They’ve modernized the public markets — but the private side is still too fragmented. Everyone knows it.

So the first part of the plan is: let’s create clear, interoperable standards for digital equity — so tech platforms, investors, and regulators are speaking the same language.

Second, there’s this false tradeoff that “going on-chain” means giving up privacy. That’s not true — and it shouldn’t be the default.

Private companies want to keep certain things private. Not because they’re hiding something, but because they’re early-stage, they’re innovating, or they’re simply not ready to disclose everything like a public company would.

At the same time, we don’t want to create opacity — especially for regulators or trusted analytics providers.

So one of our core proposals is the concept of observer nodes — trusted actors who can see what’s happening on-chain, even in encrypted or permissioned networks. These could be regulators, analysts, or data firms — giving them read-access without compromising privacy.

This is especially important because we’re seeing a rise in privacy-preserving blockchains — Canton, R3, Aleo, Provenance, zkEVMs, FHE chains. They all introduce a new kind of visibility risk. If no one can see what’s going on, violations can slip through.

But if observer nodes are built in, we can give regulators near real-time transparency, not quarterly reports filed months late.

Today, as a registered transfer agent, I send my TA-2 report to the SEC every March — reporting on activity that may have happened as far back as January of the previous year. That’s 14 months of lag.

With on-chain systems and observer nodes, you could flag compliance violations live. That changes everything.

CN: Final question — what’s something you’ve been thinking about lately that isn’t getting enough attention in this space?

JD: The exit. Everyone’s focused on how to raise capital on-chain, or how to tokenize ownership, or make equity programmable — all of which is important. But no one’s really asking: What does a true on-chain IPO look like?

It’s still a missing piece. People have tried to imagine it, but mostly in siloed, walled-garden ways. What we actually need is a co-designed blueprint, created by multiple players in the ecosystem — platforms, exchanges, regulators — working together to define what it means to go public natively on blockchain rails.

Because right now, even the most advanced tokenized companies still end up exiting through traditional channels. That’s a dead end. What we need is a way for companies to offer access to their growth — fully on-chain — without relying on legacy exchanges or middlemen.

And we’re close. On-chain capital formation is now a real market. Coinbase’s acquisition of Eco was a major signal that this category matters. We’re seeing the same metrics — and often 10x more — across the ecosystem.

But the vision is still scattered. There’s no shared roadmap for what happens after the raise.

A true on-chain IPO would mean any investor — from Coinbase, Binance, Robinhood, Fidelity — could access an equity offering directly, legally, and transparently. No unnecessary intermediaries. No fake digital wrappers. Just programmable equity at scale.

And the only way to get there is if programmable equity becomes the backbone. Without it, the infrastructure won’t hold.

We talk a lot about “tokenizing everything,” but unless we figure out the exit — the last mile — it doesn’t change the system. That’s where I think the conversation needs to go next.