Security Token Development
Security Token development is a new rage in the cryptocurrency industry. Fulfilling the requirements of the Howey test, the tokens derive their value from a tradeable external asset. It complies with all the federal security laws. The investors’ trust to put their money in various projects is improved.
Security tokens are Crypto tokens that pass the Howey Test. These tokens usually derive value from a tradable external asset. Security tokens are subject to federal securities and regulations and hence deemed as Securitized tokens. Security Token Offering is built to increase the investors' trust to invest in various projects.
security token issuance platform
.Security tokens empower investors with financial rights such as,
-
Dividends -
|
-
Profit sharing rights -
|
-
Equity -
|
-
Buy-back rights
Security Token Offering Services
Security Token Offering was created to bring the institutional investors on board the cryptocurrency and blockchain era. Through the trustless network, blockchain will automate the legal and auditing requirements with the integration of smart contracts.
Security tokens are financial securities that are SEC compliant. These tokens provide the investors with an array of financial rights that are written in smart contracts and the underlying tokens that are traded on the blockchain.
At Blockchain App Factory, we don't just build, but we pioneer in Security Token Platform Development. The tokens can be developed on your own blockchain that offers zero gas prices, enables faster transactions with no congestion of networks, and more.
That's not all, Blockchain App Factory has access to a network of investors, who would fund your project through Security Token Offering (STOs).
Security Token Technology
The Ethereum Blockchain with ERC-20 does not suffice the requirements of the securities backed tokens. The major issues include gas prices, congestion in the networks and protocol issues. To overcome the issues, Blockchain App Factory develops customized scalable blockchain and smart contracts to fit the requirements either on Ethereum or Hyperledger or Stellar.
The following are the features :
Legally Compliant Tokens
The tokens issued are embedded with smart contract which has the regulations of the registered jurisdiction coded. These include legal frameworks of fundraising, investor qualification rules & transaction limits on transfer.
Global Investor Participation
Issuance companies face problems during secondary trading when different countries are involved. Our tokens can be traded across borders with the idea that the tokens issued are securities and must comply with securities laws. The token sales and secondary trading are developed with conditionality on the smart contract.
Transparency
Blockchain ensures all the transactions including the conditional are visible to the financial regulators. The benefits of a transparent ecosystem will help the cryptocurrency market under the purview of the government regulation. The process of transfer agents are being automated the entrepreneurs can raise funds in a simpler and a cost effective way.
Wallet
At Blockchain App Factory, we develop a technology which allows the issuance companies to reissue tokens to the investors if the investor loses their wallet keys subject to terms and conditions. The wallet must compatible to the legal requirements and investor must have the right to reclaim his lost tokens.
Types of STO(Security Token Offering) Development
Equity Token
An STO where each token is backed by the stock in your company so that the holders of your token have equal rights to your actual stockholders in terms of votings and dividend issuance.
Reserve Assets Token
launch an STO
through us where the tokens are backed by your reserve of the said assets.
Debt Token
If your company would rather not tokenize your stock or reserve assets, you can raise funds by issuing Security Tokens with the promise of payback to attract debt investors.
Steps for STO Development
-
Step 1
Finding the securities which the issuance company to tokenize such as commercial estate. We at Blockchain App Factory carry out our due diligence for tokenization.
-
Step 2
Our auditing, financial and legal consultants forms the core of oursecurity token advisory
team will advise on the jurisdiction checks with regards to the on the securities titles such as credit ratings and any other parameters specified by owner. -
Step 3
A Special Purpose Vehicle or Entity(SPV/SPE) is formed especially when tokenizing securities for only the purpose of trading security tokens.
-
Step 4
The technology behind the Tokenized Securities is the strength of Blockchain App Factory. We believe ERC-20 is not an ideal solution for STO due to the gas prices, congestion of networks and changes in protocols. Blockchain App Factory will build customized blockchains with inbuilt smart contracts on top of the Ethereum or in Hyperledger or Stellar.
-
Step 5
The valuation of these securities are scrutinized by an auditing firm , post-which a value per token is suggested and the issuance company such as yours can issue a token at that price.
-
Step 6
Once the token is developed with regulations embedded into the smart contract, a dashboard will be provided for investor management for the issuer and fund management for the investors. The dashboards include KYC/AML, Accredited Investor verification and voting rights in-built for investors and project owners.
-
Step 7
The tokens are offered through a Security Token Offering (STO) for investors to purchase a legally compliant token under the framework of the legal requirements. As the smart contract ensures the automation of regulatory requirements, there are no requirements of third party intermediaries such as transfer agents.
-
Step 8
Once the STO is completed, the token are to be listed on the Security Token Exchanges for investors to trade on the secondary market. These can also be traded through Over The Counter(OTC) where the accredited investors can trade directly with the token holders.
Security Token Issuance Platform
Investor Management Dashboards
-
The dashboard provided by us is an all in one platform for you to manage the KYC/AML records, Accredited Investors, Market Cap, Fund Raising and Investments.
-
You can engage with your investors through proactive disclosures and mail them for openings in further rounds of investments.
-
You can see audit trails, checklists, activities, standard reporting process in a secure way.
-
Investors can manage their portfolio in an effective way.
-
All the announcements(voting, holdings, new offerings etc) can be transmitted through the dashboard.
-
All the transactions of the security tokens can be categorized through the Capable Management
-
The dashboard provides transparency to the Securities Token Ecosystem.
-
Bylaws, Shareholder agreements, SAFT etc. are kept in one safe location allowing consistent view across platforms.
-
Tracking shareholder management with an ability to download and confirm messages, voting items and track responses.
-
Issuance companies can distribute and the investors can track the dividends.
-
Investors can also vote through the dashboard.
Security Token Offering's FAQ
Security Token Packages
| Legally Compliant Token Architecture |
|---|
$20,000 |
| Technology |
| Custom Ethereum Token |
| Integrated Voting Rights Platform |
| Token Wallet as per Regulatory Protocol |
| Investor Managment Dashboard |
| Automated KYC/AML Integration |
| Automated Accredited Investor Verification |
| Stake Holder Registry |
| Integrated Dividend Issuance Platform |
| KYC/AML records Registry |
| Accredited Investors Registry |
| Market Capitalization Details |
| Funds Raised & Investment Details |
| Integrated Help Desk on Dashboard |
| Audit Reports & Checklists |
| Announcements within Dashboard |
| Uploading Legal Documents & Disclaimers |
| Investor Prospectus |
| Whitepaper (Owner's Manual) |
| Customized Website |
| Legal & Regulations |
| Preliminary Checks |
| Development of Documents |
| Customized Website |
| Token Purchase Agreement |
| Development of the Token’s Legal Structure |
| Disclaimers for the website and marketing materials |
| Token Crowdsale Terms |
| Private Placement Agreement with Private Investors |
| Legal Opinion on the Sale of Tokens |
| SAFT Agreement |
| Token Purchase Agreement |
| Order Now |
| Legally Compliant Token Architecture |
|---|
$50,000 |
| Technology |
| Own Blockchain |
| Hyperledger Burrow |
| Integrated Voting Rights Platform |
| Token Wallet as per Regulatory Protocol |
| Investor Managment Dashboard |
| Automated KYC/AML Integration |
| Automated Accredited Investor Verification |
| Stake Holder Registry |
| Integrated Dividend Issuance Platform |
| KYC/AML records Registry |
| Accredited Investors Registry |
| Market Capitalization Details |
| Funds Raised & Investment Details |
| Integrated Help Desk on Dashboard |
| Audit Reports & Checklists |
| Portfolio Management for Investors |
| Announcements within Dashboard |
| Uploading Legal Documents & Disclaimers |
| Investor Prospectus |
| Whitepaper (Owner's Manual) |
| Customized Website |
| Legal & Regulations |
| Preliminary Checks |
| Development of Documents |
| Customized Website |
| Token Purchase Agreement |
| Development of the Token’s Legal Structure |
| Disclaimers for the website and marketing materials |
| Token Crowdsale Terms |
| Private Placement Agreement with Private Investors |
| Legal Opinion on the Sale of Tokens |
| SAFT Agreement |
| Token Purchase Agreement |
| Company Valuation Audit |
| Incorporation - Pre STO |
| Establishment of the holding company in Malta |
| Establishment of the Maltese trading company |
| Registration of the Operation Company |
| Legal Agreements between Holding and Main Operational Company |
| Local Directors if Required |
| Registered Office |
| Tax Compliance |
| Application of Licenses |
| During STO |
| Liaise with MFSA & MDIA for Compliance |
| Post STO |
| Accounting & Book Keeping |
| Order Now |
| Legally Compliant Token Architecture |
|---|
$90,000 |
| Technology |
| Hyperledger Burrow |
| Integrated Voting Rights Platform |
| Token Wallet as per Regulatory Protocol |
| Investor Managment Dashboard |
| Automated KYC/AML Integration |
| Automated Accredited Investor Verification |
| Stake Holder Registry |
| Integrated Dividend Issuance Platform |
| KYC/AML records Registry |
| Accredited Investors Registry |
| Market Capitalization Details |
| Funds Raised & Investment Details |
| Integrated Help Desk on Dashboard |
| Audit Reports & Checklists |
| Portfolio Management for Investors |
| Announcements within Dashboard |
| Uploading Legal Documents & Disclaimers |
| Investor Prospectus |
| Whitepaper (Owner's Manual) |
| Customized Website |
| Legal & Regulations |
| Preliminary Checks |
| Development of Documents |
| Customized Website |
| Token Purchase Agreement |
| Development of the Token’s Legal Structure |
| Disclaimers for the website and marketing materials |
| Token Crowdsale Terms |
| Private Placement Agreement with Private Investors |
| Legal Opinion on the Sale of Tokens |
| SAFT Agreement |
| Token Purchase Agreement |
| Company Valuation Audit |
| Incorporation - Pre STO |
| Establishment of the holding company in USA |
| Establishment of the USA trading company |
| Registration of the Operation Company |
| Legal Agreements between Holding and Main Operational Company |
| Local Directors if Required |
| Registered Office |
| Tax Compliance |
| Application of Licenses |
| During STO |
| Liaise with SEC for Compliance |
| Post STO |
| Accounting & Book Keeping |
| Order Now |
Voting Rights
A proprietary voting platform built on blockchain enhances security, transparency and scalability which is stored on a distributed ledger. An ecosystem of governance is created for your companies security token structure to meet your needs. This reduces the overhead in the voting process and makes the governance of your organization easier and increase trust among your investors.
-
The voting rights platform ensures a peer to peer, trustless secret ballot immune to intermediary attack and exposes vote manipulation if any.
-
Through a off-chain layer, we ensure the scalability of the platform which can handle millions of votes per minute.
-
Transparency is inherent to blockchain and the stakeholder can verify every vote in the system through fully auditable codes.
-
There is no single point of weakness in the system with minimal risk of being compromised due to the decentralized nature of the system.
KYC/AML Automation
In the regulated STO, the basic requirements are KYC/AML verification reduces the risk through reputation scoring which helps issuance companies identify high-risk individuals . This helps you prove your investor's identity,risk-based authentication and preventing identity fraud. In addition, you can also reduce money laundering activities.
KYC/AML automation help in efficient onboarding of the investors in a quicker time frame.. In addition, you can stay ahead of the regulations through a flexible interface where you can respond to new developments with ease.
Accredited Investor Verification
In a simple, reliable and confidential interface companies can verify their investors. When the client signs up for our STO, a simple questionnaire, few certification requirements along with the uploading of supporting documents are sent to their mail.
We take the necessary steps in a legal way to verify the accredited investors. It is important to note that the background verification must be done via professionally licensed attorneys with ethical codes maintaining confidentiality.
Investor Prospectus
An Investor Prospectus is a document which will explain your project and the requirements of fundraising. Previously known as a whitepaper, the owner’s manual will consist of the following :
-
Legal Disclaimer
-
Letter to Investor
-
Executive Summary
-
Problem Statement
-
Solution
-
Token Technology
-
Tokenomics
-
Dividend Distribution
-
Financial Summary
-
Team
-
Conclusion
Security Token Issuance Platform
A customized end-to-end security token issuance platform for issuers and their specific target industry. Issuance companies can tokenize their Equity or Fund or any other securities such as bonds, debts etc.
As an issuance company, you can provide Tokenization as a Service and the tokens generated has the following features :
-
Automated Compliance with Blockchain & Smart Contracts.
-
Globalized KYC/AML Verification
-
Multi-Ledger Security Token Development(EOS, Hyperledger or Stellar)
-
Automated Policy and Regulations with Smart Contracts
-
Non-Fungible Tokens for every Security Token Issuer
-
Automated reporting to Regulatory Authorities
-
Tokens issued have an interoperability layer for exchanges across the world
