ICO Malta has developed a variety of bespoke tokens for client security token offerings which facilitate issuers to deploy cryptographic analogues of traditional financial instruments at great cost and time advantages in comparison to traditional financial offerings.
Our STO platform has been built to be fully compliant with Malta’s VFA act, and features fully integrated KYC/AML protocols managed by two UK licensed identity verification providers (Onfido and ComplyAdvantage). This facilitates the issuing of fully compliant securitised or collateralised token offerings. Our STO platform can process investments via bank/wire transfer, ETH, BTC and over 50 other cryptos.
Over the last year we have been contracted to develop a variety of bespoke token protocols for private banks, hedge funds and asset managers which can be combined and customised to a client’s specification. These include:
Dividend or profit share tokens
This is the core security token feature, our implementation includes a web UI, which allows the issuer to set up dividend payments independently of us (we don’t like to tie clients into expensive long term service agreements). Issuers are then free to set and issue dividend or profit share distributions at predetermined intervals as described in their whitepaper and prospectus.
Post-STO transfer limitation
we can limit the transferability of security tokens after the STO has run its course, this prevents Bob buying tokens and sending them to Alice who happens to be a compliance risk. In this instance, we deploy a web-UI where Alice would be required to submit her KYC documentation, following which it will be checked by our KYC/AML providers. On successfully clearing this, the issuer is free to whitelist her (or not if for instance they Google the prospective buys and find bad press associated with them). Once on the whitelist they are free to receive Bob’s tokens. This feature is desirable for UHNW “membership” type investment vehicles, as well as to prevent the security token becoming a bearer-bond.
In some instances private rounds offer significant discounts which place the holders at a price advantage that makes it tempting sell their tokens on day 1 of their lockup expiring to recoup an instant multiple on their investment. The traditional method of preventing this is to ‘hold’ the users security tokens and issue them in staggered periods, however once a dividend function is in play, the investors are now being short-changed their dividends (as these are automatically sent to token holder addresses). To counter this, we have created a vesting smart contract, which allows early stage investors to hold their tokens and receive dividends, yet limits them to selling X% of their tokens every month after Y months offering a best of both worlds.
These are used as safe-keeping receipts for precious metals, art, investment grade art etc, and can be combined with stable coins linked to debit cards to allow holders to access the equity held in their investments. Asset backed tokens fall into this category, as non-fungible tokens are often linked to specific items such as an individual bar of gold, or square-meterage in commercial properties.
Fractional ownership tokens
Great for real estate, yacht charter businesses etc. This allows the issuer to sell a passive income investment with a traditionally high barrier to entry (due to a high CapEx) to retail investors, with fractionalised returns being issued to the holders of the token (or possibly compounded).
We can issue bonds on the blockchain, eliminating a great amount of expenses associated with a bond issuance, allow more frequent payments, easier price discovery and liquidation.
All the above security token models (or tokenomics) can be combined to create a bespoke token to the exacting specification and behaviour of the issuing entity. Get in touch to learn how we can get your STO in motion.