Funds Raising $1B+ Using TokenSoft Security and Compliance Platform
Various Funds Issuing on the Blockchain
Needing a platform to support size, scale and security needs of institutional capital
Benefits of TokenSoft
We kicked off our support for funds in 2017, and since then we’ve grown to support a broad range of fund offerings, such as fund-of-funds and venture funds. Launching a fund can carry complex operational compliance requirements; launching a fund on the blockchain adds an additional layer of complexity due to the newer terrain and the opportunity to offer the fund in a wide range of countries.
The regulatory complexity surrounding funds provides a significant challenge. A combination of regulatory requirements generally come into play, a few examples include tax reporting requirements at issuance and during trading, stringent KYC/AML requirements that meet the FinCEN Customer Due Diligence rule, and potentially the desire to follow domestic security laws in each country where investors are solicited.
Regulatory challenges aside, funds can reach $100 million to over $1 billion in AUM, as is the case with our client Andra Capital, which intends to raise $1 billion using the TokenSoft platform.
“Given the size and scale of our offering, we require a platform proven to manage our capital safely and securely. With TokenSoft, we found everything needed and more."
- Haydar Haba, Andra Capital
How We Help
Enterprise Grade Security
It’s startling to note that nearly $1 billion of cryptocurrency was stolen by hackers in the first three quarters of 2018 alone.* The TokenSoft team designed the platform with the understanding that malware and unauthorized transfer of cryptocurrency is commonplace in the blockchain-based issuance market. The founders leveraged their backgrounds to prevent these attacks, leveraging their experiences designing enterprise and institutional products at companies like Veritas, Symantec and Goldman-backed BitGo.
The TokenSoft platform is designed to meet unique and complex compliance requirements, enabling secure transfer of large amounts of cryptocurrency.
Real Time Identity Management at Scale
Every retail or institutional investor onboarded and authorized to hold issuer tokens must adhere to the compliance requirements of the issuer. These compliance requirements may entail, but are not limited to, collections of government issued identity documents, articles of incorporation, proof of address, or proof of investor accreditation. The TokenSoft platform enables a link between these identifying documents and the cryptographic tokens that may represent LP interest in the fund or similar entity. This real time tracking of investor identifying information and ownership information enables the adherence to Foreign Account Tax Compliance Act (FATCA) reporting, KYC/AML, securities and other compliance requirements as applicable to issuers.
TokenSoft carries a breadth of experience when it comes to securely scaling blockchain applications and web applications alike. In its highest volume sale, the TokenSoft platform processed 28,000 individuals through the issuer’s KYC/AML requirements. This is a level of scalability on which TokenSoft has uniquely been able to successfully execute.
Institutional Level Custody
As increasingly sizable assets enter the blockchain, it’s important to protect them with the same level of security used for standard financial assets. With blockchain technology, we have the opportunity to employ an even higher level of security than current standards used by broker/dealers, banks, or other financial intermediaries. Security of assets has been a number one priority at TokenSoft since our start. Today, we offer our clients a choice in custody method: 1) self custody through our Knox Wallet, a mobile-first, secure cold storage, self-custody system for enterprises managing digital securities and 2) third-party institutional custody options, including Coinbase Custody.
A globally accessible sale may carry bespoke country-by-country requirements or a universal treatment of investors. TokenSoft has experience not only with varying banking requirements but also with varying securities requirements internationally. Our clients have domiciled in the U.S., Caymans, Singapore, Switzerland and other offshore locations, and our clients have sold instruments in dozens of jurisdictions around the world. We lead the market when it comes to international issuance.
Evolving Issuance Space
The environment around initial issuances of digital assets continues to evolve, both with respect to regulatory compliance and technological requirements. We’re here to help funds implement their desired structures and issuances of tokens, including technical and security measures, for their projects and ensure successful outcomes, regardless of how complex the requirements.
If you are seeking assurance in security, scalability, and compliance for your issuance, we’d love to hear from you.
*Source: CipherTrace, CryptoCurrency Anti-Money Laundering Report, Q3 2018
This content is for informational purposes only, does not constitute an offer or solicitation to sell securities, and shall not be construed as legal advice in any jurisdiction. TokenSoft is solely a technology and security business and it does not offer brokerage, advisory, or other securities. Certain information set forth in this release may contain “forward-looking statements” under applicable securities laws. Forward-looking statements include all statements other than those of historical fact, including those relating to potential investments. By their nature, such statements are subject to numerous risks and uncertainties, including those applicable to early-stage companies, rapid changes in technology, legal and regulatory matters, and other matters that could cause future results to vary materially from our expectations. TokenSoft undertakes no obligation to update forward-looking statements for any reason, except as required by applicable securities laws.