Digital Security issuances on the Blockchain: the new way to raise financing

First Security Token Offering (STO) for an EPFL start-up, Global ID, supported by the Swiss Fintech Tokenestate and HDC Legal in Lausanne.

Switzerland is today one of the only countries in the world to authorize companies to raise funds from private investors via Security Token Offerings (STO) also known as Digital Security issuances. Swiss regulation allows the creation of Digital Securities, which combine traditional financial instruments with blockchain “tokens”.

Security Token Offerings are a major evolution in the way companies can access funds. They bring together the efficiency of Initial Coins Offering’s (ICOs) while granting strong investors rights enshrined in the Swiss regulation. Thanks to STOs, private companies can issue shares or participation certificates regulated under Swiss law to Swiss or Foreign retail and qualified investors.

Global ID, a Deep-Tech start-up developing an innovative biometric identification system is launching its STO today. The Lausanne-based start-up will use the Digital security issuing platform that has been developed by Tokenestate, a Swiss Fintech specialized in digital securities, and is supported by HDC Legal, a law firm specialized in innovation and technology.

With an STO, Global ID allows retail investors to buy into its capital 100% digitally, in compliance with securities and Anti-Money Laundering regulation, and for a minimum amount of CHF 500. This is made possible by the association of share certificates with an Ethereum Token named GID. Following its issuance, the GID tokens can easily be distributed and exchanged, contrary to traditional investments.

The use of Digital securities or Security Tokens to invest in private companies and in real estate will become commonplace” says Vincent Trouche, Tokenestate CEO. “This greatly facilitates the management of securities thorough their life cycle, and allows a wider distribution to retail investors, without the need for an IPO, which is costly and time-consuming.”
The technology we have developed is very attractive to healthcare professionals. We already raised our seed funding from doctors. With this STO, we allow a wide number of healthcare professionals to invest in our company. They will be our best ambassadors moving forward.” notices Lambert Sonna, Global ID CEO.
Using blockchain to facilitate the issuance of share certificates allows the digitalization of tedious legal processes. STOs are the future of private companies financing. Global ID’s STO is an important first step, and an innovation which will serve other issuers. Companies will benefit from the possibility to raise funds directly via their website and to combine fundraising, digital marketing and creation of a community.” mentions Mr Florian Ducommun, from HDC Legal.

Source : https://medium.com/@vincent.trouche/digital-security-issuances-on-the-blockchain-the-new-way-to-raise-financing-653e0a11de1c

Posted on

August 26, 2019

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