Security token offering

from Wikipedia, the free encyclopedia

A security token offering (STO) describes a public sale of values, rights or obligations that are mapped using digital tokens. The technical basis for this is provided by distributed ledger technology , especially blockchain technology, via which tokens are issued and subsequent transactions are validated. A wide variety of assets, such as B. Securities, real estate, loans or company shares are tokenized. The benefits that result from tokenization are transparency, higher liquidity and better efficiency compared to traditional investments.

Investors or holders of the tokens have similar rights towards the issuer as with traditional securities, e.g. B. Entitlements to dividend-like payments, participation rights or interest payments.

Advantages and disadvantages of tokenization

The tokenization of assets is considered an important step in the digitization of the financial industry. For the first time, asset classes such as B. private equity or investments in the shipping industry made investable for small investors. Liquidity for previously illiquid investments, such as B. Real estate created.

advantages

  • Illiquid asset classes are becoming more liquid and investable for the masses
  • fast transferability of the digital tokens via the blockchain
  • low transaction costs, independent of third-party providers
  • transparent transaction history through pseudonymous addresses
  • Breaking down the tokens into fractions enables small investments

disadvantage

  • The safekeeping of the tokens is difficult to access for technology-averse investors. Errors in safe custody can result in total loss.
  • Often, the token does not transfer voting rights
  • Trading on secondary markets is still severely restricted. Boerse Stuttgart Digital Exchange announced the introduction of a bulletin board for P2P transactions.

Security Token Offerings in Germany

Initial Coin Offerings (ICOs) can be described as the forerunners of Security Token Offerings, which enjoyed a large influx of private investors in 2017/2018. If ICOs describe an unregulated method of decentralized crowdinvesting, STOs are intended to create the legal basis for a regulated token economy.

In order to create legal certainty within the meaning of the European Prospectus Regulation (Regulation (EU) 2017/1129) and the German Securities Prospectus Act ( WpPG ) when classifying security tokens, BaFin published a leaflet containing important information on the prospectus requirement for token issues summarizes. In it, a security token is listed as a "security (similar) token" on the grounds that the tokens can be traded on the financial market and holders may have claims to dividend payments, participation rights or interest. Security tokens are therefore legally treated as securities within the meaning of the Prospectus Ordinance of the WpPG and the WpHG and are considered financial instruments within the meaning of the KWG. Thus, a security token is accompanied by a securities prospectus, a securities information sheet (WIB) or an exception rule to the prospectus obligation.

Examples of Security Token Offerings

The first STO in Germany was carried out by Bitbond Finance GmbH on March 11, 2019. A total of 2.1 million euros was collected from investors, which, however, missed the original fundraising target of 3.5 million euros. A distribution of the BB1 ​​tokens is to take place on October 1, 2020.

In addition to individual STOs, listing platforms are also being developed that advertise several security token offerings at the same time. One example of this is the company KlickOwn , which focuses specifically on the real estate market.

Individual evidence

  1. ↑ Federal Ministry for Economic Affairs and Energy, Federal Ministry of Finance: Blockchain Strategy of the Federal Government . September 18, 2019, p. 4 ( bmwi.de [PDF]).
  2. ↑ Florian Döhnert-Breyer: Buy security tokens. In: Blockchainwelt.de. Blockchainwelt.de, accessed on August 4, 2020 .
  3. ↑ Dirk Elsner: The tokenization of the securities business. In: Capital.de. April 17, 2020, accessed August 6, 2020 .
  4. ↑ New Shore Invest - invest in digital shipping via STO. In: Blockchainwelt.de. July 14, 2020, accessed August 6, 2020 .
  5. ^ Statement by the Stuttgart Stock Exchange. Stuttgart Stock Exchange, accessed on August 6, 2020 .
  6. ↑ Federal Ministry for Economic Affairs and Energy, Federal Ministry of Finance: Blockchain Strategy of the Federal Government . September 18, 2019, p. 4 ( bmwi.de [PDF]).
  7. ↑ Federal Financial Supervisory Authority: Leaflet - Second note on prospectus and authorization requirements in connection with the issue of so-called crypto tokens. August 16, 2019, accessed August 4, 2020 .
  8. ↑ Lukas Hofer: Bitbond STO closed - What is the conclusion? July 19, 2019, accessed August 6, 2020 .
  9. ↑ BitBond STO. Retrieved August 6, 2020 .