INTERESTING FOR YOUR COMPANY?
Explore the possibilities of a
security token for your enterprise.
To understand how security tokens were created, we travel back in time.
To determine whether a token is a security, the SEC uses the Howey test. This test is named after the case of the SEC against J.W. Howdy in 1946.
With his company Howey in the Hills inc. Howey planted around 500 hectares of orchards each year.
To finance additional development, he offered half of his land to the public. He advertised on companies and professionals. The investors became landowners, but Howey was allowed to continue planting the land. The investors shared the profit from the sale of their orchards with Howey.
The SEC classified Howey’s company as security on the basis of three elements.
These are still applied to the assessment of tokens:
- ✓ An investment of money
- ✓ In a joint venture
- ✓ With an expectation of profit that comes primarily from the efforts of others
Technical characteristics of A security TOKEN
Autradety uses a smart contract for the technical realization of a security token. It is tailor-made to be fully compliant with securities trading regulations.
Depending on the objectives, the security token is issued in the ERC-1400 or ERC-20 file format. These apply as the universal standards of security tokens.
Conditions can be built in that are specific to security tokens in our smart contract. Such as implementing lock-up periods and transferring security tokens only if the owner and recipient are KYC compliant.
Every financial institution is obliged to screen its customers and clients before it does a transaction with them or on their behalf. This is to prevent money laundering and terrorist financing. This procedure is known as KYC (Know-Your-Customer). With the help of a KYC, a security token issuer must get to know his investor well before it is accepted: who is this person, from which country is he a tax resident? Can he pose a risk? What are reasons for purchasing the security tokens?
Autradety has examined various forms of financing. STOs are the best. They have the regulated nature of an IPO and better technology than ICOs.
TECHNICAL IMPLEMENTATION PROCESS STO
We analyze the
of your STO and translate it into a technical design.
The requirements are stored in a smart contract.
Then the security tokens are generated.
After completion of the capital round, the security tokens are distributed to the investors.
adjustments to the smart contract code are made.
With an Ethereum wallet address, STO investors
manage and distribute their security tokens.
A security token is the output of the smart contract.
The smart contract of Autradety stores the business rules
of a STO. Then the smart contract sends the security tokens to the investors.
The security token architecture runs on the Ethereum blockchain. This is the best solution for issuing a security token.