WP FINAL 221018 SPREADS F - Flipbook - Page 1
How It All Works
Companies will be launched by issuing security crypto-tokens on the blockchain, providing investors the
opportunity to acquire security and tokens in return for their investment. In addition, the security offerings
are limited by time or a cap on the amount of funds that can be raised. The value and number of tokens
released can be fixed or calculated according to the amount of funds raised. This occurs in the same manner
as traditional crowdfunding methods. Using this approach, the investor is able to see the range of projects on
offer with information regarding the project:
Although many venture capital and private equity firms are keen to get involved in the crypto economy,
their lack of underlying security prevents them from being able to participate. However, with Tokenise it will
be possible to enable all participants to invest, from a private individual to a hedge fund: this opens up the
investment marketplace in both size and potential. As utility token investors become more cautious, they are
demanding access to security in the firms, this translates to a system that is a more regulated open system,
enabling access to significant and more diversified pools of investment capital.
• the amount of capital a company is seeking to raise;
Compliance
• the equity being offered;
• the amount of time needed to raise the capital;
A robust regulatory framework and the ability to operate in the regulated space means compliance is always
at the centre of what we do. Complians, our in-house application, has been developed as a RegTech product,
enabling us to record transactions and build the compliance-based ecosystem in which we operate. It has
been used by numerous regulated entities and, by incorporating blockchain technology into its design, will
become a fully auditable and immutable record of compliance activity.
• the number of participating investors (over time).
Nominee
• the utility tokens being offered (if offering dual tokens);
By incorporating blockchain technologies such as Ethereum or Ripple, we will be able to offer the
following solutions:
Crypto Funds
Although the majority of crypto funds are still unregulated, things are changing and regulators around the
world are clamping down on unregulated collective investment schemes (CIS), prosecuting their operators.
By contrast, Tokenise has developed a compliant structure for assisting managers of crypto funds to tokenise
and manage within a regulated environment. The crypto funds we assist will be able to benefit from the
secondary market functionality of the Tokenise platform, including initially utilising our bespoke bulletin
board, and in future, potentially listing their fund tokens on a regulated exchange, MTF or OTF that Kession is
a member of, providing regulatory certainty not only to the investors, but also to the operators of the funds
Tokenised Assets
The fractional ownership of assets and securitisation through the use of smart contracts in the marketplace
is a recent development. As a security offering, it is necessary to be regulated in order to offer these security
products. Being authorised by the Financial Conduct Authorised (FCA) will enable us to create a structure that
complies with the highest regulatory standards. Depending on the size of the offering it will be possible to
either to list directly through the Tokenise platform or we can consider eventually listing the products on a
relevant securities platform such as a MTF.
Capital Markets
For start-up companies, capital markets have previously been largely inaccessible, and the majority of token
offerings have avoided being treated as a security due to the regulatory framework. As a solution to this
dilemma, Tokenise will develop a platform that enables participants to securitise, fractionalise, buy, sell,
assets, securities and funds: this enables businesses to benefit from the security of regulation, and more
importantly gives access to a far larger investor pool than was previously available
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The Tokenise platform will use a nominee structure for the holding and safe custody of securities on behalf
of the investors who are the beneficial owners. The purpose of this nominee structure is to ensure that the
burdens of corporate actions, record keeping, general meetings and other activities such as voting can be
recorded by a single entity. This would enable the businesses utilising our platform to focus on their core
activities without needing to engage with each individual investor directly. This function is likely to be
outsourced to our technology and FCA regulated partner Nivaura.
Technology and Security
Tokenise is working with some of the world’s leading technical architects and cryptographers to ensure that
the systems ownership and business logic are at the heart of what it does. The platform will be auditable,
scalable, secure and economical in order to work in these demanding environments.
Dual Tokens
In issuing and trading security tokens, the platform also intends to be able to facilitate a dual token system
if required by the company. A dual token system enables the issue of security and utility into the same
company. The utility token would be potentially tradeable on a utility based crypto exchange (security tokens
may only be tradeable on a regulated exchange or in our secondary market bulletin board). Although the
utility token offering will not always be applicable, this offers increased flexibility and usability to investors
and investee companies. As well as this, the second token provides a convenient option for investors to sell a
portion of their investment but still retain the equity/security.