By Vanessa Malone
You’ve read the advantages of issuing digital securities over traditional securities, assembled your legal team, and are ready to conduct your own digital securities offering. You type in ‘digital securities platforms’ or ‘security token platforms’ into google and *BAM*, you’re hit with a plethora of companies offering multiple solutions for each stage of the offering. Now what?
Well, you’re in luck because you’ve landed on the blog for the only company in the industry with a complete in-house suite of affordable, compliant blockchain solutions that cover the entire life-cycle of a digital securities offering.
Our compliance suite is so comprehensive that Globex even has numerous U.S. broker dealers who are now, more than ever, willing to assist issuers in marketing their deal when the issuer uses our proven methodology to conduct their offering on the blockchain.
Raising capital is a challenging feat in itself, with lots of moving parts, entities and team members working to complete a successful round of fundraising. Issuers choosing to go this route have to research, coordinate, and pay multiple service providers who, in turn, refer to more third parties, or their so-called API’s, for each step of your digital securities offering.
All these extra steps and costs greatly contradict the point of conducting a digital securities offering through Reg A+ or Reg D, which are meant to shorten and offer a less expensive and a less extensive capital raise than a traditional IPO.
This lack of integrated fundraising compliance solutions on the blockchain is what led our founding team to create our product suite leveraging the Ethereum public blockchain. Once our suite was created, the team knew it had to be shared with the community.
We believe having a fully integrated digital securities “tech stack” not only streamlines the capital raising and investment process for issuers and investors, but also lowers the barrier of entry for market participants to confidently move toward blockchain trading solutions.
Below, we walk you through what a digital securities offering looks like from issuance through to secondary trading using Globex’s suite of blockchain solutions:
1. Tokenizing your assets
Our digital securities platform, Tokenetics, offers a hands-on approach, collaborating directly with your team to understand and implement your company’s needs directly into your digital securities smart contract. We then generate your digital securities via an Ethereum ERC-20 smart contract tailored to your business model and relevant regulatory requirements. We also integrate what we’ve coined “peered” smart contracts alongside the issuance smart contract. This works later on in the life-cycle to add market compliance and liquidity features to your digital securities.
2. KYC investor onboarding and investor suitability
Next, we deploy KYCware, offering a 2-minute onboarding service for your investors through our high-tech, high-touch smartphone app branded to your company. The app goes further than identity verification, with app questions and forms auto-adjusting according to user entries to meet compliance and investor suitability requirements globally across jurisdictions. KYCware is also the first investor onboarding app with an integrated US Broker-Dealer Subscription Booklet, W-8Ben submission and SEC Reg D 506(c) Investor Accreditation which works to dramatically reduce the cost and shorten the whole investment process.
3. Screening investors against global AML sanctions lists
After your investors submit their information, your banker or other authorized personnel securely downloads the investors information to verify against our proprietary database of global sanctions, Politically Exposed Persons (PEPs), and watchlists through AMLcop. Instead of just a one-time check, our lists are updated daily and investors are scanned on a continual basis to enhance issuers’ AML efforts even after the primary issuance. This also comes in handy later in the life-cycle for issuers offering dividends or seeking to list on a regulated stock exchange.
4. Enabling your designated Transfer Agent to compliantly custody digital securities
We have many articles on the necessity of engaging an SEC-registered Transfer Agent to conduct a truly compliant token offering involving U.S. investors. You can read our latest here for more details. It is not only required for most Reg A+ offerings, it is also necessary for all issuers who wish to list their securities on a regulated stock exchange for compliant secondary trading. Through CustodyWare, Transfer Agents compliantly custody and secure your investors’ ERC-20 tokens from theft and private-key loss, and can pay issuer dividends in an AML-compliant manner. Securities remain in the hodlers wallet but with an added layer of investor protection as mandated by regulators.
5. Transfer digital securities to a regulated ATS or exchange for compliant secondary trading
We briefly introduced Globex’s flagship digital securities exchange software built on the Ethereum public blockchain to power the next generation of secondary trading venues around the globe. Starting with Antigua, Open Order Book powers order-driven stock exchanges on a best bid and best offer basis, with the order book transparently displayed in real time on the Ethereum blockchain. Retail investors can securely buy and sell digital securities directly through the paired Open Order Book smartphone trading app. Stay tuned for our upcoming announcement with details on Open Order Book.
We are thrilled to offer the community a true one-stop funding platform for digital securities issuance through to secondary trading. To demo our integrated solutions, please reach us at email@example.com.