Analysis of the First RWA "Default" Case: What Risks Are Worth Noting?

In mid-to-late November 2025, an RWA project based on US small and medium-sized enterprises’ (SME)) accounts receivable collapsed due to large-scale defaults of its underlying assets, causing the value of its on-chain tokens to evaporate rapidly. In the past, the market regarded “asset tokenization” as a solution to pain points in traditional asset investment, relying on the transparency and efficiency of blockchain, and thus enhancing credibility. But investment risk does not disappear; in essence, it is also “risk on-chain.” It channels the slowly brewing credit risk from the off-chain world directly and instantly, without attenuation, into the 24/7 on-chain financial world.

Today, the Sa Jie team will not discuss asset innovation, but focus solely on risk management with our old friends. Through this project, which marks the industry’s first “blow-up,” we will deeply analyze the complete transmission path of risk from off-chain to on-chain, as well as the RWA risk management framework.

II. The Illusion of Blockchain Transparency: Compliance Is the Ultimate Safeguard

High transparency is a major advantage of blockchain for RWA, but it only allows querying of transaction records, contract code, and asset flows. The ultimate success of an RWA project depends on the off-chain legal structure and rights design, not on the on-chain technical implementation.

1. SPV Firewall

To isolate the risk of the asset originator, RWA projects typically use a Special Purpose Vehicle (SPV) structure. This is a standard and effective financial tool in RWA. The asset originator transfers underlying assets such as accounts receivable to the SPV via genuine transactions, and the SPV issues tokens backed by these underlying assets. If the asset originator defaults or goes bankrupt due to its own reasons, its creditors cannot pursue the assets in the SPV, thus protecting the rights and interests of token holders.

When this RWA project was issued, it claimed to have set up an SPV for bankruptcy isolation of assets. However, under the enormous pressure of defaults, the mere declaration of an SPV does not equal an impregnable firewall; a thorough, penetrating assessment of the legal structure is still required.

2. Token Rights

The legal rights represented by tokens purchased by investors in RWA projects vary greatly, directly determining the rights enjoyed when risks arise. Generally, the rights represented by tokens fall into the following categories:

(1) Equity Shares: Direct ownership of shares in the underlying assets. In cases of bankruptcy or default by the project party, holders have the highest claim and can directly participate in the disposal and distribution of assets.

(2) Collateral Rights: Priority claim on the proceeds from the realization of the underlying assets.

(3) Trust Beneficiary Rights: Rights to receive income generated from trust assets.

(4) General Bonds: Equivalent to purchasing securities from the issuer, with the lowest repayment priority.

Many investors only focus on the yield when purchasing RWA tokens, without ever delving into the legal rights the tokens represent. When risks such as default or bankruptcy arise, they realize the differences in token rights. This kind of legal information asymmetry is an even more hidden risk than technical vulnerabilities.

In Conclusion

The first RWA default is by no means the end of the RWA industry, but rather a true beginning. It allows the industry to cool down from the technical frenzy of asset tokenization and begin to study deeper risk management. In the future, RWA projects will no longer compete on whose underlying assets are better or who can bring more assets on-chain, but on who can build a more robust, transparent, and compliant RWA risk management framework. This is the future direction of RWA!