Security tokens are the next trend for ICOs… but implementing is complicated. Here is where Dave Hendricks comes in.
Dave has amassed exceptional experience founding and scaling tech companies. He is a former start-up CFO, COO, and President, has raised over $80 million and has over 20 years of experience managing the marketing, corporate governance, due diligence/legal, and auditing functions of startups.
Today he is the Founder and CEO of SeriesX and Vertalo.
His company SeriesX specializes in offering Security Token Structuring as a Service, which means turning a traditional asset into a security token. Vertalo, the subsidiary of SeriesX, is a “cross-chain platform for Security Token issuances that enables broker-dealers, issuers, and their investors to visually manage portfolio data related to communications, compliance, and eligibility with an end goal of real-time liquidity.”
The difference between security tokens and “regular” tokens is that security tokens must follow all regulations. The advantage, compared to shares, is that potentially there is more immediate liquidity, without the company having to go public. Once the lockup period is over, and that’s typically a year for a security in the United States, then the token is freely tradable with other accredited investors.
“The only difference between a security token and a preferred share is actually in its liquidity, and that’s actually quite a magic differentiation.”
Requirements For An ICO To Register With The SEC
Registering a security offering with the SEC is heavy paperwork, requires a law firm, good finances and months of time. However, by structuring security tokens the right way, Dave believes that most security token offerings made in the United States can be exempt of the registration requirement under Reg D, under which you only have to notify the SEC of the offering. A Reg D offering is not an IPO and therefore not sold to the public at large, and so the requirements are less onerous.
Institutional Investors In The Crypto Market
Institutional investors are already quite involved in the crypto market. There are several hundred funds operating in the United States that are investing billions of dollars. Dave believes once real-world assets are fractionalized and get tokenized, Bitcoin and Ethereum will be the main trading currencies.