diff --git a/token/services/tokens/tokens.go b/token/services/tokens/tokens.go
index f758f8bf8..aee3615d9 100644
--- a/token/services/tokens/tokens.go
+++ b/token/services/tokens/tokens.go
@@ -358,9 +358,9 @@ func (t *Tokens) extractActions(tmsID token.TMSID, txID string, request *token.R
 	if err != nil {
 		return nil, nil, errors.WithMessagef(err, "failed to get request's outputs")
 	}
-	toSpend, toAppend := t.parse(auth, txID, md, is, os, auditorFlag, precision, graphHiding)
+	toSpend, toAppend, err := t.parse(auth, txID, md, is, os, auditorFlag, precision, graphHiding)
 	logger.Debugf("transaction [%s] parsed [%d] inputs and [%d] outputs", txID, len(toSpend), len(toAppend))
-	return toSpend, toAppend, nil
+	return toSpend, toAppend, err
 }
 
 // parse returns the tokens to store and spend as the result of a transaction
@@ -373,7 +373,7 @@ func (t *Tokens) parse(
 	auditorFlag bool,
 	precision uint64,
 	graphHiding bool,
-) (toSpend []*token2.ID, toAppend []TokenToAppend) {
+) (toSpend []*token2.ID, toAppend []TokenToAppend, err error) {
 	if graphHiding {
 		ids := md.SpentTokenID()
 		logger.Debugf("transaction [%s] with graph hiding, delete inputs [%v]", txID, ids)
@@ -394,13 +394,14 @@ func (t *Tokens) parse(
 
 	// parse the outputs
 	for _, output := range os.Outputs() {
-		// get token in the clear
-		if len(output.LedgerOutput) == 0 {
-			logger.Debugf("transaction [%s] without graph hiding, delete input [%d]", txID, output.Index)
-			toSpend = append(toSpend, &token2.ID{TxId: txID, Index: output.Index})
+
+		// if this is a redeem, then skip
+		if len(output.Token.Owner) == 0 {
+			logger.Debugf("output [%s:%d] is a redeem", txID, output.Index)
 			continue
 		}
 
+		// process the output to identify the relations with the current TMS
 		issuerFlag := !output.Issuer.IsNone() && auth.Issued(output.Issuer, &output.Token)
 		ownerWalletID, ids, mine := auth.IsMine(&output.Token)
 		if logger.IsEnabledFor(zapcore.DebugLevel) {
@@ -421,8 +422,7 @@ func (t *Tokens) parse(
 
 		ownerType, ownerIdentity, err := auth.OwnerType(output.Token.Owner)
 		if err != nil {
-			logger.Errorf("could not unmarshal identity when storing token: %s", err.Error())
-			continue
+			return nil, nil, errors.Wrapf(err, "failed to extract owner type for token [%s:%d]", txID, output.Index)
 		}
 
 		tta := TokenToAppend{
diff --git a/token/services/tokens/tokens_test.go b/token/services/tokens/tokens_test.go
index 458425d7a..6f9164154 100644
--- a/token/services/tokens/tokens_test.go
+++ b/token/services/tokens/tokens_test.go
@@ -63,7 +63,8 @@ func TestParse(t *testing.T) {
 	}
 	output1 := &token.Output{
 		Token: token2.Token{
-			Type: "TOK",
+			Type:  "TOK",
+			Owner: []byte("alice"),
 		},
 		ActionIndex:  0,
 		Index:        0,
@@ -75,7 +76,8 @@ func TestParse(t *testing.T) {
 	is := token.NewInputStream(qsMock{}, []*token.Input{input1}, 64)
 	os := token.NewOutputStream([]*token.Output{output1}, 64)
 
-	spend, store := tokens.parse(&authMock{}, "tx1", md, is, os, false, 64, false)
+	spend, store, err := tokens.parse(&authMock{}, "tx1", md, is, os, false, 64, false)
+	assert.NoError(t, err)
 
 	assert.Len(t, spend, 1)
 	assert.Equal(t, "in", spend[0].TxId)
@@ -91,11 +93,12 @@ func TestParse(t *testing.T) {
 	assert.Equal(t, uint64(64), store[0].precision)
 	assert.Equal(t, output1.Type, store[0].tok.Type)
 
-	// no ledger output -> spend
-	output1.LedgerOutput = []byte{}
+	// no owner, then a redeemed token
+	output1.Token.Owner = []byte{}
 	os = token.NewOutputStream([]*token.Output{output1}, 64)
-	spend, store = tokens.parse(&authMock{}, "tx1", md, is, os, false, 64, false)
-	assert.Len(t, spend, 2)
+	spend, store, err = tokens.parse(&authMock{}, "tx1", md, is, os, false, 64, false)
+	assert.NoError(t, err)
+	assert.Len(t, spend, 1)
 	assert.Len(t, store, 0)
 
 	// transfer with several inputs and outputs
@@ -121,7 +124,8 @@ func TestParse(t *testing.T) {
 	}
 	output1 = &token.Output{
 		Token: token2.Token{
-			Type: "TOK",
+			Type:  "TOK",
+			Owner: []byte("alice"),
 		},
 		ActionIndex:  0,
 		Index:        0,
@@ -132,7 +136,8 @@ func TestParse(t *testing.T) {
 	}
 	output2 := &token.Output{
 		Token: token2.Token{
-			Type: "TOK",
+			Type:  "TOK",
+			Owner: []byte("bob"),
 		},
 		ActionIndex:  0,
 		Index:        1,
@@ -144,7 +149,8 @@ func TestParse(t *testing.T) {
 	is = token.NewInputStream(qsMock{}, []*token.Input{input1, input2}, 64)
 	os = token.NewOutputStream([]*token.Output{output1, output2}, 64)
 
-	spend, store = tokens.parse(&authMock{}, "tx2", md, is, os, false, 64, false)
+	spend, store, err = tokens.parse(&authMock{}, "tx2", md, is, os, false, 64, false)
+	assert.NoError(t, err)
 	assert.Len(t, spend, 2)
 	assert.Equal(t, "in1", spend[0].TxId)
 	assert.Equal(t, uint64(1), spend[0].Index)