Onchain names in a company acquisition: the IP checklist

An intellectual property diligence request has a settled shape. You ask for the trademark schedule, the domain portfolio report from the corporate registrar, the license agreements and the open disputes. Each of those documents has an issuer outside the target, and each can be reconciled against a public register or an invoice.

An onchain name fits none of those channels. It is a token sitting in a wallet, a piece of software that holds the keys authorizing a transfer. No registrar reports on it, no office issues a certificate for it, and in some registries no renewal invoice ever reaches accounts payable. A target can hold the top-level domain that matches its house mark and nobody in the data room will mention it, because nobody was asked.

This checklist is written for the lawyer running that diligence on the buy side, and it works equally well for the seller’s counsel preparing the data room. It covers two different findings: onchain names the target holds, and onchain names that match the target’s marks but sit with someone else. For each it sets out the questions to put to management, what you can verify without them, how the asset moves at closing and what belongs in the disclosure schedule.

Why a standard IP request list misses the target’s onchain names

The request lists that deal teams reuse were built around registered rights and DNS domains, and both leave paper behind them: an application number, a registrar account, a renewal charge. A diligence team can find either one from the outside, even when the target has forgotten it.

The first reason an onchain name escapes that search is the trace it leaves. On Freename, for example, a TLD exists as a token recorded on a blockchain and held in a wallet, and the registry charges nothing each year to keep it. That absence of a recurring charge is convenient for the holder and awkward for you: the finance ledger may contain a single purchase entry from some years back, coded as marketing or software, and nothing since.

The second reason is organizational. Onchain names are often acquired by whoever in the company was curious first, and that person may have used a personal wallet because the company had none. The asset then lives outside the legal department’s register and, in the worst case, outside the company’s ownership altogether.

The third reason is vocabulary. A request for “domain names” will be answered by the person who manages the registrar account, who will truthfully report the DNS portfolio and stop there. Name onchain names and TLDs recorded as tokens in the request itself; the glossary gives short definitions you can borrow.

Two inventories the diligence team should build

Treat the subject as two separate inventories, because they lead to different deal terms. The first is an asset inventory: what the target, its affiliates or its people hold. The second is an exposure inventory: which onchain names match the target’s marks and are held by others. Mixing them produces a schedule nobody can use. In practice the asset side splits further, which gives four lists to keep.

For the exposure inventory you do not need the target at all. The Trademark Name Check on the trademark TLDs page is where to start for the TLD that matches a mark, and the Namespace Exposure Score gives a structured first reading of how exposed a brand is across onchain names. Run both before the first management call, so that your questions are specific.

What to ask the target about wallet control

The public record tells you which wallet holds the token. It does not tell you who is able to operate that wallet, whether that person is still employed, or whether the company has any legal claim over it. Those three points are the core of the diligence.

Whose wallet is it? Establish whether the wallet was created by and for the company, or by an individual. If an individual, establish whether any document assigns the asset to the company: an employment IP clause wide enough to cover it, a specific assignment, an expense claim showing the company paid. Whether a general IP assignment clause reaches a token depends on its wording and on the governing law, which varies by country. Your team decides that; do not assume it.

Who can operate it? A wallet is operated by whoever holds its keys or its recovery phrase. Ask for the names and roles of every person who has had that ability since the wallet was created, including people who have left. A recovery phrase that a departed employee once saw is a control point that still exists, whatever the offboarding checklist says.

How is it secured? Ask whether the wallet needs one approval or several. A multisignature wallet requires a set number of approvals out of a group before anything moves, which is the closest equivalent to a dual-control rule on a bank account. Ask where backups are kept, who can reach them and whether a custody provider is involved under contract.

What else is in the wallet? A wallet that holds the TLD may also hold other tokens, personal or corporate. This matters at closing: you are acquiring an asset, and the wallet that contains it may not be something the buyer wants or the individual is willing to hand over.

Reading the registry record before the management call

One feature of onchain names favors the diligence team: the registry record is open to the public. A block explorer, a website that displays the contents of a blockchain, lets you look it up with no cooperation from the target.

What the record shows is narrow and reliable. It shows that the token exists, which wallet holds it, when it was created and each transfer since. For a TLD it also lets you see the names created under it and the wallets those names went to. That history is your chain of title in the factual sense: a token that has moved through several wallets before reaching the present one invites the same questions as an assignment chain for a trademark.

What the record does not show is just as important. It carries no legal name, so it cannot tell you that the wallet belongs to the target. It says nothing about contracts made off the record, such as an option, a pledge or a license. And it does not tell you who holds the keys.

Use it first to reconcile. Compare what management tells you with what the record shows. A creation date that does not match the purchase entry in the ledger, or a holding wallet that differs from the one named in the reply, is a discrepancy to resolve before signing, like a trademark recorded in the name of a dissolved subsidiary.

Use it also to set a baseline. Note the holding wallet, the names issued and the date of the last movement at the date of your report. Between signing and closing, any change to that baseline should be one the purchase agreement permits, and names issued to wallets nobody at the target can identify widen the scope of the review.

Names issued under a TLD the target holds

When the target holds a TLD and not just a single name, there is a second layer to review. A TLD such as .yourbrand is a namespace: names like pay.yourbrand or support.yourbrand are created beneath it. On Freename, creating those names is reserved to whoever holds the TLD. So the first question is simple: has the target issued any, and to whom?

Names the target holds itself. These are part of the asset. By agreement they can move with the TLD, and the transfer steps should name each one so that none is left behind in an old wallet.

Names issued to group companies, staff or partners. These sit in wallets outside the holding wallet. They reflect a business relationship, and you should ask what was agreed when each was issued: any terms of use, any right to take it back, any link to an employment or distribution contract.

Names sold or granted to unrelated third parties. These belong to the people who hold them. A change of control of the target, or a transfer of the TLD, does not alter that. Whether a TLD holder is able to withdraw or change a name once it has been issued is a case-by-case matter that depends on the registry and on what was agreed, and it should never be assumed in a diligence report. For the buyer, the practical reading is that these names are a fixed feature of the asset: a set of third parties who will go on using names under a suffix the buyer is about to control.

Then ask about money. On Freename the holder of a TLD decides what names under it cost and may set different prices for different names. The registry also runs a royalty program that pays the TLD holder a share of the fee on each registration beneath the TLD, on the registry’s terms and activation conditions as they stand. Taking part carries a yearly cost that the registry sets, although some TLDs were registered on earlier terms under which the program is included for life. If the target reports income from this source, the question for your file is which terms apply and whether they survive a transfer to a new holder. That point is confirmed with the registry before closing, not inferred from the target’s past statements.

When a name that matches the target’s marks belongs to someone else

The exposure inventory may show that the TLD matching the target’s main mark is registered and that the target is not the holder. The finding is easy to overstate and just as easy to skip. Neither helps the client.

Start with what it is not. It is not a defect in the target’s title to its trademarks. The registrations are unaffected. It is also not, by itself, evidence of infringement: whether the mere holding of a name amounts to use of a mark, and what remedy exists, depends on the facts and on national law.

Then be clear about procedure. The UDRP, the dispute policy that brand owners rely on for DNS domains, binds registrants through the contracts of ICANN-accredited registrars. Onchain names are registered outside that system, so the familiar administrative route is not available as such. Platform policies, registry terms and ordinary court action remain, each with its own limits.

What you should assess is use and proximity to the business:

• Is the name in use? A TLD with no names issued and no content is a different finding from one with names resembling payment or support channels.
• Does the target’s business touch onchain payments, wallets or AI agents? If customers will be asked to pay to a name or to recognize one, a matching name in other hands matters more. If the business is entirely offline, it matters less.
• Is there a DNS plan? If the target has applied, or intends to apply, for the same string as an ICANN top-level domain, an onchain name that already exists under the same string is worth a paragraph. A U.S. patent held by Freename AG, number US 12,401,618 B1, describes, in the text published on Google Patents, a method that scores colliding names to decide which one resolves, with the earliest creation date as one weighted criterion. It is a patented method, not a ruling, and ICANN is not bound by it. It belongs in the report as context.

A matching name in other hands is, in most deals, an item for the risk section and the post-closing plan, not a price chip. Where the buyer decides that it wants the name, that is a separate acquisition from a separate holder, and the page on brand namespace recovery describes how such an approach is run. Nothing in your diligence should involve contacting the holder in a way that discloses a confidential transaction.

Share deal or asset deal: how the token reaches the buyer

How the name moves depends on the structure of the acquisition, and the two structures raise opposite problems.

In a share deal, nothing moves on the record if the token is already in a company wallet. The company holds it before closing and after. What changes is who is able to operate the wallet, and that change does not happen by operation of the share transfer. The keys are known to people, and those people may be leaving, staying or selling. The closing mechanics must replace the persons who control the wallet, in the same spirit as changing bank signatories, but with one difference: a bank can remove a signatory, whereas a recovery phrase once known cannot be unlearned. The clean solution is to move the token, at or just after closing, to a new wallet set up under the buyer’s custody rules.

In an asset deal, or a carve-out, the token itself is a transferred asset. It moves by a transaction sent from the holding wallet to a wallet the buyer designates; the assignment records the agreement behind it. If only part of a business is sold, decide which side keeps the TLD and whether the other needs names under it for a transition period. Where the token sits in an individual’s wallet, either structure needs a preliminary assignment to the company.

1. Freeze the baselineRecord the holding wallet, the names issued and the last movement shown on the public record at signing. The purchase agreement restricts transfers and new issuance until closing.
2. Regularize titleWhere the wallet is personal, obtain the assignment to the company and move the token into a company wallet. Make this a condition to closing if it cannot be done before signing.
3. Confirm registry termsAsk the registry in writing whether the terms attached to the TLD, including any royalty program terms, continue for the new holder or the new controller.
4. Prepare the receiving walletThe buyer sets up the destination wallet under its own approval rules and tests it with an asset of no value before the real transfer.
5. Transfer or hand over controlIn an asset deal, the seller sends the token and the agreed names to the buyer's wallet. In a share deal, the company moves them to the new wallet under the buyer's control.
6. Verify and fileBoth sides check the public record, note the transaction reference in the closing memorandum and update the IP register.

A token transfer is not reversible by a bank or a registry, so two people on the buyer’s side check the destination address before anything is sent. Where a name is sold on its own between unrelated parties, closing usually runs through onchain escrow, the subject of the escrow and transfer page; inside a larger acquisition the transfer is simply a closing deliverable.

The tax and accounting treatment of the token follows local rules and the buyer’s own policies. Raise it with those teams early.

Drafting the disclosure schedule for onchain names

A disclosure schedule entry for a trademark needs a number, a class and a jurisdiction. An entry for an onchain name needs different fields, and the point of drafting them carefully is that each one can be checked against the public record by the other side.

Build the warranties around what the schedule cannot prove. The seller can state that the schedule is complete, that the persons named are the only ones able to operate the wallet, that nothing has been promised over the token and that it knows of no dispute. The seller cannot usefully warrant the registry’s future terms. Where a fact matters and cannot be warranted, turn it into a condition or a confirmation from the party who knows. The wallet address stays in the schedule and out of any document with a wider circulation.

Add a definition. If “Intellectual Property” and “Domain Names” are defined by reference to registered rights and DNS registrations, an onchain name may fall between them. A short defined term covering names and top-level domains recorded as tokens removes the doubt. The interim covenant then bars any transfer of the token, any new name issued under a TLD and any change of the persons controlling the wallet without the buyer’s consent.

How much weight the finding deserves in the deal

A checklist can make a small item look large. Give the client a sense of proportion.

An onchain name does less than a DNS domain in several respects, and your report should say so. Because these names are resolved outside the DNS that ICANN coordinates, a browser with no added support will not open one. Freename names work in certain wallets and through a browser extension, and that coverage is partial and changes over time. Ordinary email does not run on them. For a public website that everyone must reach, the DNS is simply the better tool, and the target’s DNS portfolio remains the larger item in the IP workstream.

Where onchain names do carry weight is in the functions built around wallets: receiving payments to a readable name, giving a wallet a recognizable identity, naming software agents. The what’s live page keeps a sourced account of which functions work and where. If the target’s business plan depends on one of them, the name is an operating asset and deserves the full procedure above. If not, it is a defensive holding and the review can be lighter: confirm the wallet, regularize title, schedule it and move on. Scale the effort to the mark as well: a TLD matching the house mark of a consumer brand deserves more care than a single name bought for an experiment that ended.

Three actions to take before the next management call

If a transaction is live, three actions fit into the diligence timetable without disturbing it.

First, add a specific request to the IP section of the request list. Ask for every onchain name and top-level domain held by the target, its affiliates, its directors or employees for the purposes of the business, with the registry, the public address of the holding wallet, the persons able to operate it and any names issued beneath a TLD.

Second, run your own searches on the house mark and the principal product marks, and note the results with the date you ran them. That gives you the exposure inventory before management answers, and a way to test the completeness of the answer.

Third, decide who on the deal team reads the public record and who speaks to the registry. Assign both tasks by name, because they belong to no existing workstream and will otherwise be left until the week of closing.

If the exposure inventory shows a matching name in other hands and the client wants to know whether it can be acquired, Hush Partners acts for organizations that mandate us to find and approach a holder, under a mutual NDA that covers every exchange. The page for lawyers and advisers who refer a file explains how that works alongside your own engagement, and the page for brands and legal teams sets out what the desk does for an in-house department. The diligence itself remains yours, and your client’s counsel decides every legal point raised here.

Questions people ask

Does representation and warranty insurance cover onchain names?

It depends on the policy wording and on what the insurer was shown. Underwriters generally rely on the diligence carried out, so an asset that was never reviewed may fall under an exclusion or simply outside the insured warranties. If the name matters to the deal, tell the broker early and ask how the insurer wants the review documented.

What if the target has lost access to the wallet that holds the name?

Then the token is still visible on the public record but nobody is able to move it or to issue names under it. Treat it as an asset the company cannot use or transfer, describe it as such in the schedule and do not attribute value to it. Whether any recovery is possible is a technical question for the wallet provider and the people who set the wallet up.

Does a pledge over the company’s assets reach an onchain name?

A general security agreement may or may not capture a token, depending on how it defines the charged assets and on local law about security over digital assets. The public record will not show such a pledge. Ask the target for its financing documents and have the finance team read the asset definitions with onchain names in mind.