Singapore-based boutique consultancy IWS FinTech has launched a new proposition that helps businesses with landing fresh funds through security token offerings.
“The security token industry is booming and is projected to be worth trillions in the coming years,” says Danny Christ, Chief Digital Officer of IWS FinTech.
“And as the security token industry matures, the need for qualified advisors becomes increasingly critical. Our new practice offers an established track record and a full suite of consultancy services for start-ups and established companies looking to raise funds via security token offerings.”
Growing alongside the segments of initial coin offerings and initial exchange offerings, security token offerings combine the technology of blockchain with the requirements of regulated securities markets to support liquidity of assets and wider availability of finance. The tokens in essence are digital representations of ownership of assets (e.g. gold, real estate) or economic rights (e.g. a share of profits or revenue) managed by smart contracts in a blockchain environment.
According to Christ, “security token offerings are more secure than initial coin offerings due to lower costs, improved security, more liquidity, and are more transparent. Security token offerings also simplify management and digitalise assets.” Meanwhile, security tokens are subject to securities regulations, as opposed to initial exchange offerings which tend to trade on unregulated virtual asset exchanges.
Setting up and executing a security token offering is however easier said than done. “It’s a real greenfield market. Only those with a thorough understanding and well-versed in the regulatory and legal aspects of security tokens, as well as the cryptocurrency markets, can provide the best advice possible,” explains Christ.
IWS FinTech specialises in disruptive technologies such as blockchain, fintech and blockchain, and has already helped several businesses with exploring growth financing via security token offerings.
In its work with clients, IWS FinTech supports five distinct phases of the security token offering lifecycle.
Christ: “The first stage starts with an accurate definition of the scope, followed by the development of a customised proposal tailored to the organisation’s specific objectives. The project’s comprehensive financial model, as well as the token types and functionality, will be established in the second phase.”
“The token structure, token economics, and overall strategy will be proposed in the third phase, which will be aligned to the organisation’s objectives. The final two phases will comprise the compilation of collaterals, the finalisation of crucial legal and regulatory procedures, and the selection of technology for the project.”
“As security tokens are subject to federal laws, we are prepared to ensure businesses that seek security token offering solutions are compliant with the proper authorities such as the Securities and Exchange Commission in the US, Monetary Authority of Singapore (MAS), or any other jurisdiction,” concluded Christ.
