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Liza Aizupiete, Managing Director of Fintelum – Interview Series

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Liza Aizupiete, Managing Director of Fintelum - Interview Series

Liza Aizupiete is the Managing Director at Fintelum, a European-based token launch (ICO and STO) platform.  Liza has extensive experience in traditional fund management, and is also an experienced blockchain entrepreneur, having successfully launched and raised capital (ICO) for Globitex where she was a Co-Founder and Managing Director.

 

RS: You’ve recently launched a company called Fintelum, can you tell us a bit more about what Fintelum does and what markets it serves.

LA:  Fintelum services can be summarised as follows:
– Primary token issuance
– KYC/AML compliance
– Smart contracts (utility and security tokens)
– Crypto funds co-custody
– Token transfer agency
– Corporate actions
– Secondary token OTC exchange desk

At Fintelum, we built a token launch platform to cater to token issuers in carrying out technically sound and compliant ICO/STO token sales. Fintelum is geared to provide services on the European soil for global clientele. The main services are compliance, crypto funds co-custody, and smart contracts. For security token industry, Fintelum serves as a token ownership transfer agent, ensuring secondary market by token OTC desk and provides ongoing blockchain-based corporate action services, such as voting, dividends and announcements.

 

RS: How does Fintelum differ from other token issuance companies?

LA: Fintelum’s unique selling points are:
– Integrated crypto multisig wallet services and funds co-custody
– Token transfer agency and OTC exchange desk
– Comprehensive on demand reporting

Fintelum was founded in 2018 and subsequently licensed by the Estonian FIU to provide services for crypto industry in compliance with EU AML laws. The main differentiators lie within the benefits Fintelum clients can have from a longtime team with experience in finance and building and running our own regulated cryptocurrency exchange.

For one, Fintelum features multi-currency cold/hot wallet management system with co-custodianship for added reliability. Issuers can be reassured that all technical, blockchain and compliance related work will be carried out with utmost care. For that we have built a comprehensive backoffice, where issuers can safely navigate and control their fundraise. From creating campaigns and programs to managing investor data and affiliates.

Another differentiator is our Ethereum based security token STO implementation and subsequent OTC desk. Fintelum is able to act as a token transfer agent, maintaining blockchain based capitalisation tables or shareholder registry for companies or other tokenised assets. We are creating unprecedented availability for eligible (whitelisted) peers to exchange both security and utility tokens.

For utility token, Fintelum differentiates with our systematic approach in KYC/AML compliance. There, after a successful fundraise, the issuers can rely on a comprehensive reporting system. All data collected and verified can be made available to banks and other financial institutions that would otherwise be unable to service a non-compliant enterprise. In fact we have several banks and payment service providers that can offer fiat services to Fintelum clients.

On the whole, Fintelum services pack-in some of the most crucial features to successfully launch a crypto fundraise. The issuers will still need to have their own local legal counsel and have a clear idea of their own marketing strategy, whereas Fintelum will do the rest. It is safe to say that Fintelum service package is the most comprehensive available on the market.

 

RS: You have extensive experience in fintech and funds, what reasons did you choose to start a token issuance company instead of some other type of crypto service or business?

LA: In short:
– Companies sought our know-how
– Understanding of the industry and technology
– Anticipation of the global change in the capital markets

After having successfully completed a EUR 10 million ICO fundraise, for our former company, several projects approached us to learn how crypto crowdfunding works. And as compliance and AML took precedence over anonymous crypto donations, we thought it natural to expand on our experience and institutional understanding how the capital markets will likely evolve. ICOs or utility tokens already made a historical mark on capital markets industry. Likewise, STOs or security tokens will continue reshaping capital markets and we are excited to precipitate this change with our new business.

 

RS: You previously did an ICO with your former company, Globitex, what did you learn from that ICO that can help token issuers on the Fintelum platform?

LA: Our advice:
– Find the right partners
– Work with professionals
– Grow your community

Our major takeaways from running an ICO was that it matters a lot at what stage your company is, what shareholders and partners you have and which service providers you choose for your fundraiser. You may have a wonderful idea, technically impeccable product. But you need professional service providers that will do everything else for your fundraise to actually happen.

We were very lucky with ours. We managed to raise EUR 10 million and closed our public sale in a matter of 24 hours. Not discounting the timing when we ran our campaign, it is also important to have a clear idea of whom you want to target as your investors and/or product users – your community. Because an ICO as well as STO campaign works inadvertently as a marketing campaign for your current or future product or service. And you need to invest the time and effort to reach out to your community, to show the world that your product exists and is worth investing in.

It is worth noting that STOs make more legal sense, but much less retail buzz. The times of raising hundreds of millions for a white paper ideas with no hard cap are definitely gone. But ICOs are not dead. I still anticipate some major utility tokens to be released this and next year. STOs on the other hand can work beautifully under crowdfunding law exceptions up to EUR 5-8 million, and above – according to the Prospectus Regulation (in July 2019 replacing the Directive) in Europe.

For the ICOs a fixed and guaranteed hard cap will add to the success and popularity of the fundraiser. With STOs, hard cap is replaced by clear legal rights and expectations.

 

RS: What types of companies do you think are best suited to launch an STO?

LA: In my view:
– Small or medium working businesses, ideally with revenue streams
– Global fund management companies with existing subscribers (investors)
– Real estate or financing projects with attractive interest rate offer
– Alternative energy projects with eco impact and good dividend prospect
– Gaming and sports with large retail following

Today, the potential buyer of an STO will need to overcome burdensome KYC/AML profiling process to be compliant with the sales of a security. And depending on the jurisdiction and the project offering, the pain levels may vary. But it is clear that investing in an STO or ICO today is much more complicated than just a year ago would have been, contributing towards a development of a utility token project. This is why the STO must be attractive enough an offer for the pain of investing. Indeed, for equity or debt tokens, an STO issuer needs to have a great proposition on the table to be able to attract investment.

 

RS: What types of companies would you personally like to see launch in the cryptocurrency space to help the industry as a whole reach wider adoption?

LA: I’d bet on:
– Sports and games
– Virtual reality
– Food

At Fintelum, we get disproportionally more enquires from real-estate related companies than from any other sectors. This is presently the case. And it may be due to the fact that real estate is a hard asset. Like commodities, precious metals, real estate is something people understand. Investing in complex equity schemes may require more sophistication and/or risk appetite. Whereas I would personally like to see utility tokens continue to persist. We have come across several great ideas. But the fear of the present downmarket poses resistance and unwillingness from the managers to delve into the process of launching a token.

The three categories, namely sports/games, VR and food industries are most appropriate for ICO type of fundraise, because of the loyal retail client base they all either have or have the potential of commanding. Finance as a sector has already been done, with caveats. It brought about institutional interests, and serious price volatility as a result. But, by tapping into the mass market though either of these industries, we may be able to sustain a steady and solid adoption rate.

 

RS: You’ve been a female entrepreneur in the cryptocurrency space for over three years, can you tell us about any benefits or challenges being female in a male-dominated field may have brought?

LA: I was born in Latvia and educated in Switzerland. According to Open Knowledge report by the World Bank, six economies—Belgium, Denmark, France, Luxembourg, Sweden and topping-off with Latvia —score 100 in the Women, Business and the Law index, meaning they give women and men equal legal rights in the measured areas, whereas Switzerland scores just marginally below at 97.50. In fact Latvia has the highest proportion of female executives in the entire EU, according to the latest EuroStat survey.

This shows that generally women should not be experiencing any difference or special challenges in the developed world economies. And it is no different in the nascent crypto space. Although the industry is predominantly male, the rules are the same for both genders. Hence, I have not felt particular challenges being a female entrepreneur. Indeed, the only challenges are mostly self imposed. This is because, by some gender bias, females tend to be more critical, especially of themselves. So, if anything, the challenges are self inflicted and are completely unrelated to external factors.

 

RS: Can you describe briefly what you think the next two years looks like for ICOs and STOs.

LA: The coming years will be a slow recovery from the ICO exuberance that culminated in the years 2017-18. It will be a recovery and maturing of the cryptocurrency and crypto assets industry, where STO will have an important place, setting precedents across jurisdictions.

ICOs had reached unprecedented 10-fold returns on investment, raising in excess of USD 20 billion in funding, in the years combined. The crypto fundraising will continue, but it will happen in a more professional way; more law-abiding manner; hopefully, innovative at the same time.

It would be unfortunate, if the law makers decided that we don’t actually need innovation, and that the existing system is good enough as it is. My hope is that competition will increase, and the barriers of entry will not be disproportionally raised. So the new entrants and innovators can have a chance of their lifetime to actually make the word a better place.

 

RS: Is there anything else you would like to share with the readers?

LA: To inaugurate the launch of Fintelum services, I invite potential token issuers to take part in our Easter arrangement. From 21 March to 21 April 2019, Fintelum will wave half the onboarding fee to all eligible token issuers who come through during this time.

Contact Fintelum here to launch your compliant ICO or STO token sale.

In addition, to energetic self-starters, using the hashtag #TokeniseYourAssets in your social media will help land an internship and work opportunity with Fintelum.

Contact Fintelum at info@fintelum.com for more information.

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Moresh Kokane, CEO of Konkrete – Interview Series

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Moresh Kokane, CEO of Konkrete - Interview Series

Moresh Kokane is the Founder of Konkrete, he has worked in the finance and tech sector for the last decade and previously successfully launched two start-ups.

In 2014 you launched Estate Baron, one of the first real estate development crowdfunding companies in Australia. What inspired you to combine real estate with crowdfunding?

I had worked in the US for about 9 years before moving to Australia. I had already seen the rise of Realty Mogul and Fundrise in the US. Australians are far more in love with real estate than the US with each Australian being 3 times more likely to be invested in real estate than an American.

Real estate being a lumpy asset is an ideal fit for crowdfunding which allows people with smaller amounts to participate. Doing real estate equity crowdfunding in Australia was really a no brainer.

 

When it comes to Estate Baron, are profits derived from the developer or the investor? Could you share some details on the profit model?

We provide 3 key services.

  1. Given that it is a securities offering, we help structure the offer documents. What we have been able to achieve is a commoditization of the process. Real estate projects fundamentally share the same lifecycle. Acquire land, decide what to build on it (plans), construct and sell (or hold for long term). Doing a full retail securities offering can be quite tedious but given the repetitive nature of the business model, we were able to come up with templates which allowed us to drive the cost of compliance down significantly.
  2. We also turned our tech into a SAAS platform, whereby each developer can use their own front-end skin on top of our backend. This allows them to promote their own offers under their own brand to their clients. On Estate Baron itself we can list all the offers as a quasi-aggregator.
  3. And we also offer investor promotions for select offers.

There is a flat fee for the drafts, a recurring charge for the tech and a % of funds raised capital raising fee.

 

It seems that Konkrete was a natural evolution of Estate Baron as it offers a distributed share registry designed for the real estate sector. For readers who are unfamiliar with this, could you explain what a distributed share registry is, and the benefits it provides investors and developers?

Konkrete is fundamentally Estate Baron v2.0

On Estate Baron we had a full investor portal where we had online application processing, project information pages, share registry, investor updates etc.

We are keeping 100% of the retail financial licensing and compliance from Estate Baron, bulk of the tech and swapping out the backend centralized share registry with a distributed one.

Each offer is typically setup as a Public unlisted company and legally maintains its own registry. A registry as you know is a record of all the shareholders, how much they own, etc. Typically, these are maintained centrally.

Using a blockchain enabled registry has a few significant advantages. The first is transparency, it also brings a wider reach of investors on the global crypto markets and it makes liquidity simpler.

But what we are really excited about is smart securities. By putting the investment operations on the blockchain we can give investors real time insights on how the money is being spent. Instead of sending money to a bank account, we can receive stable coins in a smart contract wallet. And instead of bank loan drawdowns we can trigger funds release automatically based on certain events triggered by Oracles.

What it means for the project is real time, automatic disclosure which reduces cost of ongoing compliance. And by introducing transparency and immutability to the operations we can generate a lot of trust in the ecosystem. Coupled with a wider reach and liquidity this drives down the cost of capital for the venture.

Note that while we are focused on real estate, the underlying legal structures and technology can be used for any other ventures which are unrelated to real estate as well.

 

One of the stated benefits of Konkrete, is reducing the housing affordability crisis, could you walk us through how this works?

Konkrete being an evolution of Estate Baron aims to do something about housing affordability. We intend to make home ownership affordable through 2 main approaches.

The first is fractional ownership of the house you live in. Instead of buying the entire house and loading up on debt, if we can allow people to live long term in a house that they co-own alongside other investors that reduces the upfront outlay a buyer must make. It also gives investors the opportunity to buy a piece of real estate by not having to stump the entire amount.

Second is the supply side. House sticker prices include a hefty development profit. If we can get people to do co-development for the houses they wish to live then the development profit can be passed back to them. This model is already quite popular in Berlin, Germany and these syndicates, collectives are springing up in Melbourne as well.

By bringing together more people online and allowing them to achieve consensus in a decentralized fashion, we can replace the developer.

Finally, we are working on a real estate backed stable coin as our long term moonshot. That is something we always keep one eye on.

 

What are some of the different solutions and products that Konkrete will be offering?

We continue to offer fundraising solutions for real estate projects. The same model can be applied for non-real estate fundraising as well (Public company and prospectus). We have already done offers in Australia, New Zealand (both full retail) and US (Reg D accredited).

We are also going beyond security tokenization and looking at the Asset tokenization model. One of the limiting factors of securities tokenization is the jurisdictional limitations one has. We must qualify investors etc, restrict distribution. Also, while public companies and registered managed funds in Australia are allowed to maintain their own registries, exchange listed funds have to be recorded on the exchanges central registries.

The SEC is adamantly against non-custodial security structures. So, there are limitations to where an STO can take us.

However, the real opportunity lies in Assets which are recorded in a peer to peer fashion. Hence the repositioning to an Asset tokenization platform.

We have already launched an invoice factoring market place based on the Asset tokenization premise called factorium.co that is built on the Konkrete technology platform.

(Use the invite code: factorium for early access to the closed beta.)

 

Konkrete has a utility token, The Konkrete Token (KKT) – an ERC-20-based token – which powers the Konkrete platform. Could you tell us more about the KKT token and how its intended to be used?

KKT is an platform level token. We are still nutting out a few things in it in terms of whether we should contemplate going down the path of our own chain. In the short run, each application built on the Konkrete tech is likely to have its own token.

For instance Factorium has Factor tokens, which we use to incentivize users to submit invoices for sale on the platform. The tokens are also used to incentivize verification of these invoices by the buyers. Buyers are also rewarded for repaying on time.

The investors use Factor tokens to pay for transaction fees and use of the platform.

Here is a simple flowchart of the process.

 

You are currently selling shares in the foundation company (Konkrete Distributed Registries Ltd ACN 617 252 909) When is the offer closing and what’s the expected raise amount?

We are currently live on Bank to the Future platform. We are open for another couple of months and are only raising a small amount $500,000

We are currently generating revenue and have much of the product ready.

 

What are the financial benefits that will be offered to investors? Also, will these shares eventually be tokenized?

Absolutely the shares will be tokenized. Shareholders are becoming part owners of the business and will share in the capital gain and will receive regular dividends which we intend to programatically distribute via smart contracts. All our revenues will be fed into smart contracts and we intend to turn our own operations into a transparent dAPP.

 

What will these raised funds be used for?

These funds will be used for further refinement of the tech and driving user adoption.

 

Is there anything else that you would like to share about Konkrete?

Unlike a number of other portals, we are an existing profitable business that has been around for a few years. We have been in the crowdfunding space for ages and have a strong understanding of the regulatory frameworks. We know what works in this space and what does not. In addition, we also have bulk of the tech ready and also a strong investor community already using us. We do the tech but also the issuance of the securities inhouse which puts us in a unique position. We have a solid team in terms of Sean my cofounder who is taking charge of the operations.I am quite happy about our positioning as an Asset tokenization portal and am excited about the launch of our first product built on Konkrete which is Factorium.

Readers can visit the Konkrete Listing or Konkrete website for more information.

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Myles Milston, CEO of Globacap – Interview Series

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Myles Milston, CEO of Globacap - Interview Series

Myles Milston, is the CEO & Founder of Globacap, an end-to-end solution for Capital Raising, Asset Administration, and Custody of Digital Securities.

 

You were previously CTO of Colossus Bets, which is a successful sports betting business operating out of the UK. Were you initially introduced to bitcoin and crypto in this role?

Colossus doesn’t use bitcoin or crypto in its business, however I did see bitcoin gaining traction in the wider gaming industry, and I started to explore blockchain more after seeing this. Prior to Colossus though – I did almost buy a load bitcoin when it was at $300, unfortunately I didn’t understand enough about blockchain at the time and decided against it at the last minute. I’m sure everyone has their ‘almost bought bitcoin’ story!

 

What made you shift from CTO of a successful sports betting business, to founding Globacap?

Prior to Colossus, my background was capital markets: starting off as a programmer in a bank, then quantitative equity research analyst, derivative structuring and sales, and later algorithmic commodities trading. So when everyone doing an ICO in 2017 was trying to avoid their token being called a financial security, it made me think about structuring a real financial security as a token.

The advantages were apparent: (i) instant transferability of private assets, and (ii) simple administration (e.g. corporate actions, stock splits, buybacks, etc). It was so compelling that I had to start Globacap. The founder of Colossus was one of our first investors.

 

Could you share with us what exactly Globacap does?

We’re an automated capital markets platform. Regulated by the FCA with passporting across Europe.

Our automated platform does:

(1) Securities Issuance – all of the administration throughout a capital raise, including the structuring, approving, and distribution of offering documents while ensuring regulatory compliance across 41 countries (and counting), and issuing the tokenized debt or equity securities to investors.

(2) Securities Administration – simple, one-click cap-table management, including all corporate actions (stock splits, buybacks, etc), restructuring, proxy voting, and paying out distributions (dividends or coupons). The difference between us and other cap table management platforms is blockchain. When a transfer of ownership takes place, it is reflected in the cap table in real-time, slicing off a layer of administration overhead that the non-blockchain platforms can’t escape from.

(3) Digital Custody – we are an authorised custodian for blockchain securities and cash.

We are also the only company to date that has created tokenized equity as a direct shareholding, without using a nominee structure. In other equity tokenizations globally, a nominee was required to act as the legal owner of the underlying shares. However, we created a structure that works around this within the existing bounds of regulation, allowing the token holder to also be the legal holder of the underlying shares.

 

In June 2019, Globacap successfully exited from the FCA’s regulatory Sandbox Cohort 4, becoming the UK’s first fully regulated digital security offering and administration platform. Can you share with us the experience of being in Cohort4?

Great experience. The FCA successfully pioneered the sandbox concept amongst regulators globally, we know of several other regulators that are now trying to copy the FCA’s success. We had a case officer assigned to us on day one, he was available throughout the process at any time and was always extremely helpful, even replying to emails on the weekend (what government organisation does that?). The Sandbox gave us the opportunity to trial our new technology and processes in a controlled regulatory environment, which ultimately led to receiving full authorisation in a quicker time frame than might have been possible without the Sandbox.

 

Two months ago Globacap announced a strategic partnership with Archax which offers secondary market trading. Could you elaborate on the benefits of this partnership?

Globacap is focused on private investments. However, some of those securities issuers may seek full public secondary trading, and if they do then Archax will be ready to list and facilitate trading in those securities. They have great institutional support, and core technology supplied by Aquis, which is a leading European equities exchange and provider of matching engine technology. We are a partner in order to use Archax as a listing and trading venue.

 

Globacap was recently recognized as of the UK’s most disruptive companies in the Disruption50 index, which highlights the UK’s most disruptive tech companies. Did this achievement surprise you? Has it helped to bring in additional clients?

It did surprise me as we hadn’t heard of the Disruption50 index prior to being nominated! We’re thrilled and humbled to be included in this index, amongst other highly disruptive tech companies. We believe that we are disrupting the traditional securities market, and we will increasingly do so in force as we continue to scale our business. The recognition did indeed send additional clients in our direction.

 

Investors can currently invest in tokenized private assets from around the world on your platform. Do you accept USA investors? Are there any restrictions on international investments?

We do accept US accredited investors, depending on the specific offering. Around the world, each country has its own unique set of financial promotion rules. Even within the EU there are small differences between some of the member states. Our platform streamlines this for an issuer – automatically showing or hiding certain investment opportunities to specific investors depending on their location and type, ensuring local regulatory compliance at all times.

 

Globap is raising £3 million. Could you tell us more about this raise and what the funds will be used for?

We’re in the late stage of completing a funding round at present. A large portion of funds from this round will be used for marketing and scaling the platform. To date we haven’t done extensive marketing, instead we have been focused on building out the product and gaining regulatory authorisation. Having done that, and having completed several transactions on the live platform, we are now starting to market the platform and scale.

 

Where do you see Globacap being positioned in 5 years?

We are focused on private assets in the small and mid-cap segment. In other words: too-big-for-crowdfunding through to listed on a small/mid-cap exchange such as the LSE AIM market. We believe the market is over-priced and under-served for that demographic. Our tech gives companies a better experience, an easier process, full regulatory compliance, lower costs, and empowers the larger end of that range to stay private for longer – giving investors access to secondary market liquidity while avoiding the overheads associated with becoming a public entity.

 

Is there anything else that you would like to share with our audience?

This is an exciting phase in the evolution of the securities industry. It’s now possible for private assets to trade more freely, for paper to truly disappear in securities administration, and for billions of dollars worth of private assets to be securitized cost effectively – potentially unlocking a new wave of economic growth.

To learn more visit our Globacap business listing or visit the Globacap website.

 

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Claus Skaaning, CEO of Digishares – Interview Series

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Claus Skaaning, CEO of Digishares - Interview Series

Claus Skaaning is the CEO of Digishares, a software solution that is used through the issuance process and the ongoing management of the tokenized shares.

 

You were previously the COO of Venturefusion – a crypto-security ecosystem for startup creation and growth. How did you transition to becoming CEO of DigiShares?

The vision of VentureFusion is to create a decentralized incubator platform for startups. It will work as a collaboration and bootstrapping platform where founders can tokenize the equity in their startups (even if no legal unit exists) and use the equity tokens as a means of payment for anyone that contributes to the startup. Founders can then make a plan for how much equity they want to spend to get various parts of their startup developed, making individual equity token allocation plans for short-term contributors such as freelancers and long-term contributors, such as co-founders and permanent team members, under vesting conditions. VentureFusion is still an ongoing active project but it primarily managed by my co-founder Yuriy Zubarovskiy these days.

VentureFusion prompted us to look at how to tokenize equity and in early 2018 this was a relatively new concept. We went to some of the first conferences in Europe on the concept and decided to create a new project, GoSecurity, which would focus on tokenization of securities. This project later re-branded to DigiShares and I became the CEO. It is now my primary focus to manage and develop DigiShares.

 

Could you elaborate on the services that DigiShares offers?

DigiShares is one of the leading providers of white-label infrastructure for securities tokenization issuance and management in Europe. Our first product was a single-project platform for issuance and longer-term management of tokenized securities, and we are just releasing a major upgrade that can handle multiple projects with a lot more functionality. We are one of few companies in Europe – and the only one in the Nordics that can provide an operational platform of this type.

Our platform can handle the complete workflow of an STO (security token offering), from investor registration, verification (KYC/AML), approval, to the actual purchase of tokens with fiat or crypto, signing of contracts (e-signatures), token holder cap table overview, communication with token holders, voting (shareholders’ meetings), payment of dividends, etc.

For tokenized equity, we offer a unique function where we allow a proportion of shareholders to be non-tokenized, i.e., as digitized as possible but not tokenized, so with no tokens issued. This is by customer request as some of our clients have voiced concerns that they would like to approach both crypto and non-crypto investors – and non-crypto investors may prefer a non-tokenized registration. Another unique function that we are working on is a mini-exchange, an internal OTC-like trading platform for the token holders within a single project.

Overall, we provide solutions to enable anyone to conduct their own STO or offer a number of simultaneous STOs. We primarily work in white label partnerships where clients offer the solution under their own brand name.

In addition to providing the software, we also provide access to the security token ecosystem. We have a big network of partners for legal, investments, custody, KYC/AML, etc. Some of these are integrated into the platform.

 

Digishares is one of the few companies in the industry that is headquartered in Denmark. Do Danish securities regulations support the digitization of shares?

While we are based in Denmark and concerned about local securities regulations, it is important to state upfront that we are jurisdiction agnostic and can operate from any jurisdiction. Indeed we have ongoing projects in both Europe and the US.

Locally, we are working with a Danish lawyer and the Danish regulators to establish whether shares can be represented as tokens. So far, our lawyer has established that tokenized shares are supported by Danish legislation but some details need confirmation from the regulator and the Ministry of Industry, Business and Financial Affairs. DigiShares has applied to participate in the sandbox of the Danish regulator to further analyze how tokenized securities can co-exist with Danish law.

Some countries do not support the tokenization of shares since they require either paper-based stock certificates or notarized trading. Fortunately the Danish securities legislation supports digitization of shares and has neither of those requirements.

The ability to tokenize shares (and other types of securities) is of course important for DigiShares and for Danish companies, but it will have importance outside of Denmark as well, since securities that are issued in Denmark can be passported to any EU member state. We believe Denmark could be a good STO destination for the above reasons – but also because we believe other typical STO costs can be significantly reduced here (incorporation, legal costs, etc.). As an added benefit, Denmark is a highly trusted financial jurisdiction with one of the lowest levels of corruption in the world.

 

How is the security token ecosystem and community in Denmark?

It is as of yet quite small but we are doing our best to develop it with regular conferences in Copenhagen. We’re organizing an annual conference focused on tokenized securities (Fintech Disruption Summit – http://www.fintechdisrupt.dk/en/home/) and regular events on different types of tokenization, next time on September 12 with a focus on real estate tokenization (http://www.digishares.io/events).

We are presently the only Nordic company with an STO issuance platform and we are also the first to conduct an STO. However, we expect others to join us soon.

 

You’re currently in the process of raising funds for your own STO. How much are you raising, and what benefits will investors receive?

We are raising just below EUR 1 M. This relatively low limit was set to enable us to approach retail investors and market the STO publicly across Europe. In addition, we’ve filed a form D in the US so we can approach US accredited investors. European regulations is more flexible than the US and enables us to make a more “democratic” STO since we are allowed to target retail investors in almost all European countries.

We have designed our STO so investors receive common stock in the company with exactly the same governance rights as founders, similar to a standard IPO. Many STOs design “handicapped” tokens with quite limited governance rights for investors but we didn’t want to do that. In general, we believe it will be a problem for the STO industry if issuers keep creating tokens with very limited investor governance rights.

 

What are the plans for the raised funds?

The raised funds will be used to speed up our development & marketing efforts. In addition, there are certain licenses we would like to obtain in order to extend the scope of our business. In general, we are seeing more leads & opportunities right now than we have the resources to exploit.

 

You are arranging an event on tokenized real estate in Copenhagen on September 12. Do you see real estate as being the most promising asset class to be tokenized?

Yes, if you look at statistics and speak to industry experts, there is consensus that real estate is the biggest homogeneous chunk of the STO market right now. So currently, we are directing our marketing and development efforts in this direction. Our real estate tokenization event will be attended by around 100 real estate professionals from the Nordics. 90% of them are non-blockchain people that we hope to motivate and inspire to adopt blockchain. In general, we don’t go to many blockchain industry events but rather spend our efforts on the traditional financial & real estate industries.

We hope to announce a real estate STO quite soon, and we are also involved in a really exciting project about creating Eurasian security token exchanges.

 

What other asset classes will you be focusing on?

Through partners we are also looking at debt and bonds, but we are primarily focused on equity at this stage. The platform can handle any type of security.

 

Where do you see the industry being in 5 years and the role of DigiShares in this industry?

We currently see two major trends; one with startups attempting to create a new parallel financial infrastructure and another with incumbents adopting blockchain and approaching the new opportunities in their own speed. These two trends will eventually merge and a new financial infrastructure will emerge where some old financial institutions will still exist and some of the new players will be established as leaders. We will see just one or two main security token protocol standards. The consumer (investors) are the real winners with much decreased fees for trading, decreased interest rates for debt, increased interest rates for deposits, faster and more efficient financial operations, etc., etc.

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