One of the more attractive uses of blockchain technology is the creation of new tokens to hold real assets. While we’ve seen a number of such tokens, regulatory compliance in the real world is still an issue for many companies.
Security token sale platform and SME marketplace Block Stocks today announced that it has secured Swiss compliance for its platform and will launch a blockchain-based digital token sale system for startups and small to mid-sized businesses. As a result, Block Stocks offers an exciting alternative for smaller businesses that want to raise capital, while providing security for both the company and its investors.
Block Stocks has created a platform that offers services and consulting in legal, financial, IT, and marketing areas while connecting trustworthy investors with prescreened businesses. It does this through the use of blockchain technology that allows it to tokenize real assets, called SME Security Tokens, that become investable, liquid, and tradable.
In essence, Block Stocks has created an investment platform that enables businesses to raise capital more efficiently. Importantly, the system only offers investors prescreened investment opportunities.
“Our ultimate goal in creating Block Stocks is to help SMEs raise capital and lower unnecessary barriers that currently hinder both SMEs and investors from achieving greatness,” Block Stocks co-CEO and CVO Martin Wos said. “We want the SME owners to focus on what they do best, which is why we provide all services in-house, including executing the entire Security Token sale and finding appropriate investors on behalf of the SMEs.”
Today’s announcement is important because legal compliance has been a thorny issue. There’s a lot of talk in the blockchain community regarding which types of token should be regulated and which laws apply. Block Stock’s legal division is working with Swiss law firms to ensure that businesses on its platform receive full assistance during the process of securities issuance and investment prospectus preparation, as well as assisting with other regulatory aspects of fundraising.
Block Stocks’ Security Token sales are automated. The company uses its technology, called “Liquid Stocks Protocol,” to tokenize all startup and SME equities into Security Tokens. Once equity tokenization is complete, a Security Token sale on the Block Stocks platform begins. All business and marketing materials are distributed to the platform’s network of investors.
Following today’s announcement, Block Stocks can legally offer two profitable revenue-sharing properties. During each SME Security Token sale, up to 5 percent of newly issued SME security tokens will be allocated for the benefit of all Block Stock token holders, meaning that the token holders will become co-owners of all of the SMEs that ever raised capital on Block Stocks. Once each SME token sale is completed, all Block Stocks token holders will receive cash payouts amounting to up to 5 percent of the fundraising value.
“Investing in Block Stock tokens is essentially the same as investing in thousands of ventures,” BLock Stocks co-CEO and CMO Estefano Elhawary said. “All tokens will be backed by real businesses, and our token holders will be able to profit from every single one them.”