The First Electronic Capital Transfer to Ethereum by Tokenestate
Swiss-based Tokenestate migrated the first blockchain-based digital equity in the world to the Ethereum network. The move is only one of many recent innovative safety token innovations on Ethereum, indicating that the blockchain is poised to lead FinTech's new revolution: financial securities market tokenization.
Why Tokenestate Question First Electronic Equity in the World on Ethereum
On 22nd November 2018, Tokenestate used blockchain technology to pass the first digital equity of the self-proclaimed nation.
Commenting on the transaction via YouTube, Tokenestate CEO Vincent Trouche:
“Today, we conducted the first digital share transaction. That’s the first in Switzerland, and the first in the world. So that’s a big milestone for us— but also for all private companies. Today, companies can legally represent equity by using blockchain-based tokens and have investors buy and sell equity digitally.”
The sale was carried out through the platform of Tokenestate which is ultimately a Software-as-a-Service ( SaaS). It provides organizations with compliant means of issuing and handling digital assets, usually referred to as 'security tokens.'
More precisely, the transaction involved a transfer of digital blockchain-based assets that represent shares of Tokenestate SA on the Ethereum blockchain in return for Swiss Francs.
Why protection tokens in a disruptive manner will support private businesses
The platform of Tokenestate aims to help private enterprises raise capital efficiently, while maintaining a 'private' status.
They provide services that involve initial fundraising from private and institutional investors, facilitating secondary market trading, verification of Swiss-compliant KYC and AML, and general management of tokenized securities.
The real benefit that is given, they claim, is to allow private issuers to handle a large number of investors in a user-friendly way. We do so by digitizing certain procedures that historically involved the use of multiple parties — such as voting for example.
The culmination of these programs contributes to a new form of capital raising for private companies. Despite the ongoing regulatory concern in the crypto-currency domain, according to Tokenestate, such concern has no position in security tokens.
The regulatory criteria for Swiss-based security tokens were discussed by Tokenestate legal advisor Florian Ducommun:
“In Switzerland, shares in limited companies can be represented by — or encapsulated into — blockchain-based digital assets without the need to get an accreditation from FINMA. However, issuers need to comply with existing applicable securities law.”
Explained increase in SEC activity and the transition to security tokens
Other pioneers in the safety token industry outside Switzerland have shared similar views as regards regulatory requirements.
Bruce Fenton has confirmed unequivocally that security tokens do not require further legislation. They are essentially the tokenisation of conventional securities in finance. What they have to do then is abide by pre-existing securities laws — and show transparently adherence to them. Notably, Harbor CEO Josh Stein made similar remarks.
Increased SEC activity, which seems to target the advertising 'utility tokens' from ICOs, has already affected the broader cryptocurrency market. Several firms have scrapped ICOs because of regulatory issues and turned to Safety Token Offerings (STOs).
When this practice becomes a popular trend, there is real potential for increased performance on platforms like Tokenestate.
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