TokenFunder’s driving mission – Investing for Everyone – is to make innovative investment opportunities in the for the Exempt Market accessible and available to the “Everyday Investor”, not just wealthy investors, and create a regulatory-compliant secondary marketplace. We believe tokenization is the future of capital markets and we therefore designed TokenFunder’s platform to leverage the latest in decentralized blockchain technology to make investing in the Exempt Market safe, easy and efficient.
The digital shares on the TokenFunder platform have 3 key benefits:
1. Digital Ownership, with Rights and Regulatory Oversight.
Tokens on a blockchain are a digital representation of ownership. Tokenholders are the new shareholder in a digital economy. There are several kinds of tokens but tokens issued with designated investor rights are referred to as “security tokens” since they’re considered securities under securities legislation. Those rights are described in real-world securities offering documents designed to disclose the ownership rights the investor is purchasing. Security tokens can represent real world debt, equity and many other forms of financial assets.
The difference between a cryptocurrency (e.g. bitcoin) and ownership tokens (such as the FNDR token issued by TokenFunder) is that a cryptocurrency is often used as a payment mechanism in a blockchain and owners of the cryptocurrency have no rights. In the cryptocurrency arena, there is no regulatory oversight of the bitcoin blockchain to hold someone accountable. because there is no one organization that owns and manages the bitcoin blockchain.
Digital ownership tokens, on the other hand, are also called “security tokens“, a form of digital asset or “crypto-asset”. Issuing securities can only be done by registered firms and tokenholders can expect that a regulator (e.g. Ontario Securities Commission) will ensure that the company issuing the security tokens provides a defined standard of disclosure in its Offering Memorandum and that investors can know that a registered dealer (in our case the Exempt Market Dealer is TokenGX Inc. which operates the TokenFunder.com platform) has conducted both due diligence (i.e. Know-Your-Product) on the offering and has assessed suitability (i.e. Know-Your-Client) of the investment for the investor. (You can read more about TokenGX’s special terms for issuing crypto-assets on the Canadian Securities Administrators site: https://www.securities-administrators.ca/industry_resources.aspx?id=1626 )
2. Non-Custodial Token Distribution.
The TokenFunder platform is a non-custodial platform. We designed TokenFunder to issue and register security tokens to investors on a public blockchain and specifically not take custody of investors’ assets. It means the platform does not hold the private keys to investors’ assets – investors hold the private keys to their digital wallet. It’s an efficient model that puts custody in the hands of investors and reduces the various legacy costs of share registries and share certificate custodians. This is also important as there is much concern about recent hackings and manipulation of centralized cryptocurrency exchanges – in most cases, these exchanges have held custody of investors’ assets.
3. Secondary Market Trading & Liquidity.
The security tokens distributed by the TokenFunder platform are specifically designed to be transferable amongst investors. This means that our security tokens will be tradable from investor-to-investor, wallet-to-wallet. TokenFunder is currently seeking registration of its future marketplace operations with securities regulators.
How do we achieve regulatory-compliant liquidity? At the risk of sounding technical, TokenFunder generates modified versions of standard “ERC-20” tokens with an innovative smart contracts that act as regulatory-compliant KYC Controller and Transfer Controller, specifically ensuring that TokenFunder tokens are only traded in a secondary market once investors satisfy certain requirements. With TokenFunder’s technique of issuing tokens, we’re able to address regulators’ key concerns (e.g. insider trading).
If you have any questions, don’t hesitate to contact us firstname.lastname@example.org
Become an Issuer:
If your company is looking for funding and wants to be an Exempt Market Issuer, please get in touch with us at https://www.tokenfunder.com/onboarding/issuer