Investing in Tokenized Assets & Security Tokens
Over the past century, financial markets have been shaped with unequal access to investment opportunities by its participants. The current industry set up in many jurisdictions is perceived to be discriminatory by investors. Venture Capitalists, Institutional investors, accredited investors and High Net Worth (HNW) individuals have either exclusivity or priority access to opportunities like Initial Public Offerings (IPOs) or promising new ventures at their early stage of development.
The existing asymmetry of opportunities, legacy regulations with excessive protection of “orphans & widows” category of retail investors traditionally have put smaller investors at a disadvantage. Today, however, major advances in DLT technology and updates to the regulatory frameworks promise to bring disruption to the current set up in the industry, to improve existing financial markets and to enable the creation of the new markets. ‘Smart Sherpas’ mission is to empower investors around the world by introducing the power of “D3“ (“D-cubed”) to the investments industry, which stands for “Digitized. Decentralized. Democratized.”
THE POWER OF
‘Smart Sherpas’ is collaborating with businesses to securitize/tokenize fractional ownership rights on the public ledger to make them equally accessible to every category of investors ranging from retail to larger institutions. All the investors are given the opportunity to benefit from the cost-efficiencies of digitized assets and smart contract automation.
The distributed nature of the DLT technology provides a decentralized record of ownership on the public ledger, which effectively eliminates the need for a central authority to guarantee safety or accuracy of such a record. It creates an entirely new level of financial mobility for the investors and gives them the freedom to participate in world economy by-passing multiple layers of costly financial intermediaries, – all without sacrificing investor protection rights and asset security.
‘Smart Sherpas’ is determined to democratize the access to investment opportunities by offering fully decentralized digital assets to a broad pool of global investors without discriminating by geography, jurisdiction, size of the investable amount or other unfair criteria, while strictly following the applicable regulations and respecting investor protection rights.
State of the industry
“The Most Innovative Projects Will Involve The Tokenization Of Assets. This has nothing to do with cryptocurrencies or tokens used as a payment instrument on blockchain. Representing digital or physical assets as tokens on a DLT-based network allows participants to reinvent processes and develop new business models. This is uncharted territory from both a business and technology perspective.”
— Forrester Research:
“Predictions 2019: Distributed Ledger Technology”. November 7, 2018.
On a mission to fix the damage of ICO-mania
How is STO different from ICO?
According to a study conducted by two researchers from Boston College, 81% of ICOs in 2017-2018 were identified as scams. The explosive growth of blockchain technology and popularity of cryptocurrencies triggered the ICO-mania among the general public. Unfortunately, the majority of projects received inflated valuations, that were not justified by their underlying business models.
How STOs are different from ICOs? Essentially, Security Tokens are converted rights to an asset or to an economic benefit in the form of a programmable token powered by self-executing smart contract on a blockchain. Unlike with Utility Tokens and ICO, economic rights embedded in ST have full legal protection of investors under existing securities laws. This is the same level of investor protection as with traditional equity, bonds or other assets and securities.
‘Smart Sherpas’ foresee long-term benefits of DLT technology for the FinTech industry. Our team of seasoned executives and experienced advisors is determined to fix the damage of ICO-mania and restore investor trust to Token Offerings by:
- Applying traditional business logic and valuation techniques, and
- By working exclusively with Security Tokens Offering projects
of ICOs in 2018
Investor Rights Protection
and regulatory compliance
The long lag time that it took regulators to get involved during the ICO-mania of 2017-2018, allowed many token offerings to take place without compliance with the existing securities regulations, leading to fraud and exit scams on a large scale.
The transition from unregulated ICOs to Security Token Offerings to filter legitimate and viable projects from scams is the only route for the industry to regain investors’ trust. By definition, all Security Token Offerings are subject to legal securitization frameworks established by the regulator (e.g. by SEC, FCA, ESMA, FINMA, etc.) and mandated in the applicable jurisdiction.
To ensure regulatory compliance and full legal protection of the investors, Smart Sherpas has developed SS-20 Token Standard and compliance protocol. It is leveraging smart contracts for the automation of compliance procedures on the STO platform. The database with business rules ensures adherence to the applicable security regulations while keeping transactions seamless during all stages of Security Token lifecycle starting with the issuance on the day of the initial token offering and continued with transactions on the secondary market.
Features & Benefits
Smart Sherpas STO platform is a marketplace where businesses can digitize their assets or economic benefits to then offer them to a range of investors via Private Placement or Public Crowdsale. The platform’s easy to use interface enables, retail or institutional investors to explore the available investment opportunities and review legal and business documentation of the offering. An investor is able to participate in the Security Token Offerings from the Main Dashboard on the platform, based on their investor accreditation status, investment maximums, geographic restrictions or other preferences or as required by law.
Transactions records of the purchased security tokens are placed on the public ledger protocol for full transparency and protection of the investor’s ownership rights without violating the privacy of their information. Platform integration with public blockchain via MetaMask wallet or similar provides Investors with freedom, mobility and 24/7/365 liquidity for their digital assets.
All users registered on the platform, including token issuers, investors and third-party service providers are required to complete the identity verification process, KYC/AML procedure, etc. This way Smart Sherpas is able to provide all market participants with a safe and regulatory compliant investment environment while reducing transaction or counterparty risks.
Who can be an investor
and how to become one
Membership registration on ‘Smart Sherpas’ STO platform is open to investors around the world without any restriction. Residents from any jurisdiction are welcome to use the platform to the extent that is allowed by law in the applicable jurisdiction(s).
Our enterprise-grade platform is equally suited for use by Retail Investors and Institutional Asset Managers, providing them with an opportunity to diversify holdings in their portfolios with digital assets, participate in new markets created for previously inaccessible assets classes, develop new revenue streams, benefit from greater liquidity for alternative assets, – all with reduced friction and at a lowest possible cost of transactions.
To become an investor on ‘Smart Sherpas’ STO Platform all investors are required to complete the following six-step process:
- Account setup and registration on the platform
- ID & investor accreditation status verification, KYC / AML screening
- Funding of the account
- Review of STO’s business and legal documentation, subscription to the offering(s)
- Participation in the offering
- Receipt of purchased Security Tokens in investor’s MultiSig crypto-wallet
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