Blockchain SaaS platform startup TokenSoft launches the first security token issuance platform for crypto assets
We’ve all heard about initial public offering (ICO), a fundraising mechanism used by startups to raise funding and sell their underlying crypto tokens, in the form of crowdsales, in exchange for bitcoin and ether. It’s somewhat similar to an Initial Public Offering ( IPO ) in which investors purchase shares of a company. However, not all ICOs are created equal. There are in fact at least three types of tokens issued through these crowdsales: equity tokens, security tokens, and utility tokens. New investors and beginners often struggle to understand the difference between them.
Equity tokens are stocks offered startups where individual investors or companies are given part ownership of the Blockchain and voting rights over the Blockchain.An utility token might be best compared to a gift card. An utility token on the other hand, is not designed to be an investment. The major difference between security and utility tokens is that security token holders are entitled to ownership rights, whereas utility tokens function as coupons and give holders no rights or stake in a company’s platform or assets. Unlike a utility token which represents future access to a company’s product or service, a security token is one that has been backed by external, tradable assets. The good thing about security tokens is that they grant companies with the ability to issue tokens that represent shares of company stock. Security tokens are also subject to federal securities regulations.
So there are risks for new investors who may not be familiar with how the entire process works, especially when it comes to the compliance of ICOs with government regulations. That’s where one startup comes in. TokenSoft is a new startup aiming to do all the heavy lifting and reduce all the risks involved by providing a white label token sale platform with the tools necessary to run a stable, compliant, and secure token sale.
Co-founded in 2017 by Mason Borda (CEO) and James Poole (CTO), TokenSoft helps users navigate the intersection of blockchain and compliance safely and securely. TokenSoft provides an enterprise-grade, security token issuance platform enabling companies and funds to raise capital while complying with US and International regulations. TokenSoft provides best in class security, compliance and scalability token issuance services to financial, emerging-growth and enterprise companies in over 50 countries.
The startup currently supports Regulation D, Regulation S, and Regulation A+ offerings. Following the successful launch of its token-issuance compliance platform to emerging-growth and enterprise clients, TokenSoft, Inc. (“TokenSoft”) is excited to offer the first security token issuance platform to fund managers. From hedge-funds to fund-of-funds, TokenSoft provides services to a broad range of financial vehicles.
“After successfully launching two crypto-asset funds, a fund-of-funds and late-stage venture fund, we are excited to expand our services to fund managers by merging traditional finance with blockchain technology,” said Mason Borda, TokenSoft’s Founder and CEO.
TokenSoft’s enterprise grade token issuance and compliance platform provides the unique set of features financial investment funds require to raise funds globally. From consumers to institutional investors, we enable investor on-boarding and payments through our token issuance and compliance engine supporting over 50 countries.
Using a tokenized security allows traditional investment funds to issue and track equity interest in their fund without the need for third-party platforms. This blockchain-based equity interest is attributable to a verified investor and the investor’s cryptocurrency wallet or bank account which may receive distributions for return of capital or earnings.
“Funds backed by tokenized or blockchain-based securities represent a paradigm shift in the way limited partnership interest will be managed while increasing liquidity and automating bookkeeping,” said Mr. Borda. Additionally, TokenSoft’s service for fund managers can enforce trading restrictions on the blockchain-based tokens such as lock-up time periods and location-based restrictions.