Security tokens offerings (STOs) are rapidly gaining in popularity among investors and blockchain startups, as an innovative way of minimising market speculation by providing regulatory compliant asset-backed securities. Managing the sale, distribution and compliance of these security tokens can pose significant technical challenges for new companies, who may lack the initial funding and expertise to run a successful STO alone.
For many blockchain companies and investment funds, sourcing capital through STOs offers a wide range of benefits over ICOs, such as access to accredited investors in select countries that unregulated ICOs cannot legally reach, as well as a regulatory framework to operate within that offers both parties protections and stability.
This does however, mean that startups will need to adhere to much stricter processes and will be expected to develop a certain degree of infrastructure prior to starting the STO, in order to comply with these stringent measures.
These pre-requisite features can include:
- Developing smart contracts to ensure purchased security tokens are accurately recorded and distributed to investors after the token sale is completed.
- Ensuring security tokens are compliant with the relevant country’s securities laws.
- Create a secure, reliable and autonomous platform that can handle potentially thousands of transactions during the token sale and can process various currencies, such as fiat, BTC and ETH.
- Produce marketing materials and clear client-centric strategies for token lockups and sale bonuses.
- Verify token sale participants using KYC/AML checks.
- Offer some form of post-sale token management where investors can buy/sell and organise their tokenized assets.
Tokeny is a Luxembourg-based Tokenization platform that has been specifically designed to address these technical issues, by offering a professional suite of end-to-end token sale services. Tokeny is the first dedicated company that allows blockchain startups to radically increase their speed to market, by providing the token issuer with a white-labeled, highly secure and rigorously tested platform to launch from, called the “Funnel”.
The Funnel is an off-chain contributor portal that can not only process all token sale transactions (in both fiat and crypto) but also handle everything else in between from KYC/AML verifications, disclaimer agreements and issuance. Tokeny utilizes Ethereum-based smart contracts to process and finalizes all transactions as well as initiate token distribution; guaranteeing the greatest level of transparency, immutability and security.
Startups taking full advantage of this tokenization platform will also benefit from Tokeny’s inclusive SICOP certification service; a regulatory compliance assessment which determines if an STO/ICO satisfies the standard of ‘an ethical, fair and transparent market’. The certification draws on the top practices observed in the traditional IPO market and also covers consumer protections and rights.
Other services include a fully functioning post-sale dashboard which grants the token issuer a host of administrative options including managing announcements to token holders, dividends, buybacks and corporate events. These features can also be automated using built-in reporting and cash distribution tools.
Tokenization is quickly becoming the new-age fintech solution for blockchain-based and traditional businesses to raise seed-stage capital, as well as monetize their assets. By simplifying the complex technical process of running an STO, the Tokeny platform is providing a truly invaluable service to the market and helping to drive the mainstream adoption of this innovative concept.