Security Token Issuance: Core to an Issuer’s Success |Digital Security Frontier Vision #7
Welcome to Digital Security Frontier Vision: The Voice of the Core Builders from Global Digital Security Industry .
Sean Nasiri, Head of Biz Dev at TokenSoft. Sean is also an entrepreneur, investor, advisor, and philanthropist. He started his career as an early pioneer in the equity crowdfunding space and founded GenYrator.
This week we are welcoming Sean to share his points on Issuance Platform In STO industry, which Asian readers are paying close attention on.
1、What should a company do to prepare for an issuance?
At TokenSoft, we see a few criteria that issuers should have for readiness prior to embarking on a digital security issuance, and this would be true regardless of their jurisdiction.
First, a company should have secured qualified legal counsel to provide guidance to the project, go-to-market plan, and the jurisdictions involved. Second, it’s important to have detailed product plans, typically with diagrams, to show how the parties involved interact with the product or token. Next, an issuer should have a budget, objectives for the raise, and plans to get there. Please note that TokenSoft doesn’t assist with finding investors or fundraising, instead we provide a suite of products that help issuers comply with banking, security, and tax laws on a global scale.
Recently, we have observed significant variations in how projects set themselves up to achieve their goals. From investor outreach to targeted geographies, to working with broker-dealers, and back office compliance teams to internal teams — success tends to favor the prepared. Finally, issuers who are truly ready to go will have a compelling whitepaper or presentation that not only shares their vision but tells a clear story to prospective investors.
2、What are the main differences between TokenSoft and other issuance platforms?
TokenSoft is the leading end-to-end primary issuance and management platform solution for globally compliant digital asset securities.
Our primary differentiator from other issuance platforms is our dedication to building bespoke institutional grade products that are tailored to meet the unique needs of every client. While most of the industry are creating low-touch, repeatable, out-of-the-box issuance portals with baked-in legal terms and smart contract functions, TokenSoft works hand-in-hand with our clients’ executive teams and legal counsel to create a custom platform that fits their specific requirements
TokenSoft is a primary issuance platform first and foremost, our founders and tech-first team members hail from technology and security industries and combine 20 years of experience in blockchain to provide a complete suite of products that manage the lifecycle of a digital asset. This includes industry leading solutions such as the first self-custody solution made for digital assets, Knox Wallet, integration with Coinbase custody, open-sourced flexible ERC-1404 compliant token standard, post-issuance management platform, and ownership interest in a broker-dealer.
3、What are the common characteristics of issuers that have chosen to work with TokenSoft?
TokenSoft has worked with a variety of issuers. Typically, issuers that choose TokenSoft prioritize compliance and value the team’s expertise, experience, and reputation in order to protect their own.
In 2018, we worked with a lot of VC-backed blockchain startups, protocols, and VC funds. This year, we are spending time with more mature companies and larger institutions, along with seeing continued interest from venture capital funds. We see various bright spots, including real estate and private equity. We’re also starting to see more alternative investment opportunities enter the space as well, specifically around debt and dividend-paying tokens.
4、What are the characteristics of ERC-1404? And how many tokens on the Ethereum blockchain are ERC 1404 -compliant?
· ERC-1404, developed by the TokenSoft team, is designed for security tokens that carry complex compliance requirements. It was developed as a token standard with corporate governance, banking, and securities laws in mind and with the help of top-tier exchanges, financial institutions, and law firms.
· ERC-1404 is fully open source, which enables it to provide flexibility and interoperability within the Ethereum universe; it is compatible with most other ERC-based security token standards on the market.
· ERC-1404 supports enhanced compliance requirements, such as investor whitelisting and transfer restrictions.
· TokenSoft is actively working with several issuers on projects that will leverage ERC-1404.
5、TokenSoft introduced a wallet for digital assets and securities recently, can you tell us what differentiates Knox Wallet from other token wallets?
· Knox Wallet is an institutional-grade, self-custody solution for enterprises seeking to securely store and manage digital securities and digital assets. It combines secure, multi-signature, cold-storage custody with an easy-to-use- mobile-first interface.
· Knox Wallet’s institutional-grade security is based on layered infrastructure across an online device, offline air-gapped devices, and a hardware ledger device, to achieve multi-signature requirements for transactions.
· By keeping keys encrypted, storing them offline, and requiring multiple owners, Knox Wallet ensures the safety of funds.
· Knox Wallet is differentiated in its security, UX, and mobile-first sensibility. It’s also the first wallet of its kind to focus on custody and administration of digital securities for institutions.
6、Some people think that Issuance platforms are “the heart of STO”, what is your opinion？What are the relationship between trading platforms, securities issuance platforms, and fundraising platforms?
At TokenSoft, we view our role as an issuance platform as core to an issuer’s success. The process we support is the first step in the ecosystem. Without issuers having the proper foundation to launch their digital assets, the rest of the ecosystem does not function. This is especially true this early in the cycle as we have yet to hit a critical mass. More so than a fundraising mechanism for issuers, we believe our primary role as a platform is to help ensure that ongoing compliance standards are met.
7、What impact do you think America’s regulatory policies will have on the global digital security industry?
We certainly see many jurisdictions looking at the US Securities and Exchange Commission and other U.S. regulatory bodies as their signal for forming guidance. It’s our belief that a global fabric for compliant digital securities is needed. We see this in our work at TokenSoft and work across jurisdictions to support our clients.
We are also seeing a lot of global jurisdictions take a more progressive approach by providing regulatory sandboxes and issuing various licenses to attract more players within this very exciting new industry.
Digital securities will need to adhere to securities, banking, and tax laws, regardless of jurisdiction. Today, jurisdictions differ in their requirements and we’ve built a scalable workflow that supports investor onboarding for over 50 jurisdictions worldwide. Over time, this may get simpler but for now, we have our clients’ back in getting it right regardless of the jurisdiction.
8、What changes will take place in the coming year or years in the global digital security industry?
The infrastructure is still nascent and being built. For the ecosystem to become more mainstream and accessible, two things are necessary: 24/7 access and a common global compliance fabric.
Additionally, digital assets, in most jurisdictions, are only available to accredited investors at the moment, and many issuers are still waiting for clearer guidance from legislators before allowing public offerings to occur.
9、Is there anything else that you would like to share about TokenSoft?
TokenSoft supports clients across the end-to-end lifecycle of their issuance project. The issuance process is broken up into 5 parts; many clients work with us across all stages:
- Legal structure, which outlines compliance standards and smart token requirements
- Investor onboarding
- Security fiat/crypto transference and custody
- Smart contract minting and distribution
- Post issuance investor management
TokenSoft sits at the cutting edge of helping companies leverage the evolution of digital securities, which I believe are the future of finance. We look forward to helping an increasing number of companies across a broad spectrum of segments and geographies.
Thank you for the interview!
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