FTW Token SEX #06: The Core Benefits of Security Tokens for Issuers and Investors.

Welcome to the 6th edition of the FTW Token SEX Series. A Series of blog posts by the Whitelist0x Team, well … inspired by weird tickers in the blockchain fundraising sphere. Read more about the First Series Here.

Ever mistaken features or benefits for values or used them interchangeably, primarily benefits and values? People often confuse the three. Sales ‘especially in the blockchain sphere’ people talk about their “value propositions” and then go on to list the features and benefits of the product they are selling. However, in the case of Whitelist0x, the team believes there is a very distinct difference between the three.

While there’s no single difference between products built on the blockchain as they all share the same benefits of using the technologies, the only thing that separates them is their core value propositions. Issuing security tokens a.k.a. digital shares or stocks using the smart contracts powered by the Blockchain has tons of benefits for both issuers and investors.

4 Benefits of Security Tokens for Issuers.

Issuing security tokens through programmable code also known as smart contracts using the Blockchain comes with tons of benefits for small businesses that plan to tokenize their company’s equities. Some of these are legality, functionality, liquidity, affordability, and much more.

Legality.

Security tokens are regulated financial securities just like stocks. Whitelist0x isn’t claiming to be a law firm but it does leverage its extensive partnerships with securities attorneys from the U.S., Canada, U.K., and specific European Countries such as Germany to provide security token issuers express SEC, CSA, FCA, and BaFin filing solutions.

Functionality.

As BIG as Amazon is, there’s literally nothing the Company’s shareholders could do with their AMZN stock than trading. Also, while traditional utility tokens cannot act as securities, security tokens can act as utilities. With the help of the smart contracts, an issuer could choose to use their security token as a payment method on their platform, voting rights, network gateway, loyalty programs, etc.

Liquidity.

Depending on the jurisdictions chosen, with security tokens, issuers have got an absolute control of creating more liquidities by allowing not only international investors but also listing their securities on various exchanges.

Affordability.

Compare to launching an IPO or other security token platforms, issuer’s affordability journey with Whitelist0x starts from approving their proposal to launching their public relations, fund marketing, and investor relations campaigns to drafting their offering memorandum, filing with the SEC to creating, issuing, and listing their security tokens.

4 Benefits of Security Tokens for Investors.

While investing in traditional token offerings only come with eligibility, there have been a series of scams due to the fact that the current market is not regulated. There are hundreds if not thousands of benefits for investors investing in security token offerings. These include but not limited to security, profitability, equity, and eligibility.

Security.

Securities laws might be different by jurisdictions. However, their concept of formation is to protect investors, maintain market integrity, facilitate capital formation, and so on. Investing in a security token offering means obtaining the legal rights to complain about an issuer to the securities regulators in question. This is where the Private Placement Memorandum [ PPM ] protects both issuers and investors.

Profitability.

Investing in a traditional token offering returns nothing to investors other than trading. But in security token offerings, this basically means investors are entitled to receiving dividend payments, sharing profits, receiving interests, and so much more. Fine, if unregistered securities a.k.a. utility tokens issue dividends, etc. that doesn’t mean they are security tokens. The dividends being issued are being done illegally.

Equity.

When an investor invests or participates in a traditional token offering, they become a tokenholder, but investing in regulated security token offering qualifies investors as shareholders in the issuing company and not an ordinary tokenholder as in traditional token offerings. Being a shareholder in an issuing company of a security token offering means an investor owns a part of such company.

Eligibility.

Traditionally, investors cannot buy or sell securities such as stocks in some countries if they are not a citizen or resident of those countries. In the case of security token offerings, regardless of where an investor comes from or lives, yes, THEY CAN!

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Whitelist0x is what it is :: a Whitelisting Firm. That says it all. However, there’s more beyond the name. Whitelist0x focuses on helping small businesses go public to raise funds via the security token offering mechanism. Unlike similar security token platforms that only offer technical solutions, Whitelist0x enables private companies to launch extensive public relations, integrated marketing, and investor relations campaigns, draft various offering documents such as prospectus, file with securities regulators in the U.S. and various other jurisdictions, and then issue security tokens that represent shares and allow shareholders a stake in their company’s equity as well as a share in their profits in form of dividends, interests, and so on.