How did you first get involved in the blockchain space?
Early 2011 I read about Bitcoin online at a bulletin board with lots of active and interesting members. Pretty soon I was more interested in the underlying technology and started to read on a daily basis about it at various sources (reddit, bitcointalk, etc.). After Ethereum was introduced in 2013, followed by the pre-sale in 2014 and the launch in 2015, I followed the progress and possibilities closely. After the ICO madness, I decided to become active and combine 2 worlds I understand quite well being Real Estate and Blockchain, with a serious approach towards product development and regulation.
You’re currently managing 3 projects, Blockimmo which specializes in tokenizing real estate, STX Swiss which is a decentralized security token exchange, and TokenFactory which is a technology provider for asset digitization. Can you let us know which came first?
Coming from the Real Estate industry I’m rather familiar with the challenges around this illiquid investment class and the high entry barriers. Initially, the company I founded was called “blockimmo”, with the vision to enable anyone to invest in real estate (access) and, in addition, turning this asset into something more liquid. With our 2 fantastic developers (Michael Dietz / Jesse Ngatai) we developed our (primary issuance) platform on the public Ethereum Blockchain, without the introduction of any proprietary standards or useless in-between (utility) tokens. In addition, we conducted several (successful) rulings with the financial regulators of Switzerland and Liechtenstein related to the tokenization of assets. In order to live up to our second promise (liquidity for the secondary market) we initiated STX.SWISS to demonstrate the possibilities of a trustless, peer-to-peer (decentralized) exchange without an operator, for tokenized assets like real estate. Summarized, we built a tokenization solution for both the primary and secondary market. In order to broaden our potential clients and partners we decided to rename the company to Token Factory Switzerland Ltd. The platform (brand) “blockimmo” will naturally still be used for real estate tokenization.
Blockimmo tokenizes real estate, currently all the properties are in Switzerland. Will we be seeing more international real estate options?
Yes, definitely. In fact, the Swiss Real Estate market is, thanks to its attractiveness amongst established players (investors) quite tricky to get started. Currently, we have several projects (both existing properties as well as property development projects) in the pipeline which are located outside of Switzerland and will be announced in due course.
How do you source and select the real estate portfolio that is offered?
This is a good question, which applies to any real estate investment platform (irrespective if you use blockchain technology). Due to my experience in the real estate market (12+ years) and of course due to the fact that we are one of the few platforms that actually already have tokenized real estate with public available smart-contracts for the security tokens issued and traceable transactions of the investments on the public Ethereum blockchain – we gained a lot of attention and receive a lot of requests for future tokenization cases.
Is STX Swiss currently licensed, if not are you in the process of acquiring a license? What jurisdiction will this be licensed in?
STX.SWISS is a decentralized exchange proofing the concept how security tokens can be exchanged on a public Blockchain (Ethereum) without the involvement of any controlling party (operator). This means that no centralized party controls any important element that require a license, for example the wallet (only decentralized access is possible) but also more important elements like the order-book (there is none) or the liquidity providers (only possible through a decentralized process). More information can be found in our blog posts (high-level / more tech focused). We are however in progress of establishing a regulated exchange, with centralized elements (in order to control certain elements which are required by the regulator to be controlled). We do this together with a licensed institute based in Switzerland and hope to announce further details in the near future.
What are the requirements to list a security token on STX Swiss?
We require that the security token is under control of the asset owner (issuer) at any point in time. Simple put, this is what makes our tokenization solution unique, as with blockimmo (TokenFactory) we introduce a smart-contract “whitelist” which is attached to the default ERC20 token smart-contract. Inside the “whitelist” there are the address of identified investors (meaning they went through a compliant KYC/AML on-boarding process). Although we call it a “whitelist” it’s actually a mapping mechanism, so with our solution you don’t lose (transaction) speed no matter if there are one thousand or one million address whitelisted.
Token Factory offers asset digitization services. Could you elaborate on what the different types of services are?
Yes, currently we offer an important puzzle piece for tokenization; being the technical solution that has been multiple times audited and executed before and is available for any other asset. Another important aspect is that this solution is based on the public Ethereum blockchain, open standards and thus is “future proof” for the upcoming Decentralized Finance ecosystem. In addition, we do not make the asset owner (issuer) depended on us, they are in full control and ownership of the smartcontracts representing the tokenized asset. Of course, based on our experiences, we offer consultancy services mainly around the topic of tokenization and financial market requirements and challenges.
What are the white label services that are offered by Token Factory?
There are plenty of niche markets with strong players where tokenization as such brings benefits to the existing solutions. We are open to provide our technical solution as a complete white label service (Software as a Service / SaaS) for those players and are currently actively working on launching such in the near future.
You offer investor management; can you elaborate on what these management services are?
A key puzzle piece related to security tokens is, besides our on-chain whitelist, the way how you onboard the investors and how you manage them actively to stay regulatory compliant. We have built a complete paperless on-boarding solution, integrated with strong KYC and AML providers and offer this to our clients who seek a working technical solution.
Is there anything else that you would like to share with our audience?
Yes, we’re currently very close to partner with a strong, regulatory compliant partner and will then be able to offer a full “one-stop shop” for tokenization. So not only a strong technical solution, but also provide a solution for the legal, regulatory, compliance, distribution and marketing/PR elements. All from one provider with know-how, quality and speed, really understanding true value proposition (liquidity provider) for both the issuer and investor. We’re still at the beginning of the era of tokenization and there are exciting times ahead of us!