Knowledge Base & FAQ

Introducing you to this new world of finance

Articles

General FAQ

What is a Security Token Offering (STO)?

Through the Liqwith.io service any small or medium-sized enterprise (SME), start-up or scale-up can tokenize its shares in a cryptocurrency and bring it to the public market. It can then raise capital in the market from private investors in a security token offering (STO). The company will raise the desired liquidity and will only have to pay out dividends when the investments are paying off. Just as in the regular stock market the company is obliged to report properly and timely on its progress and results. Via an STO up to EUR 5 million can be raised under Dutch law every 12 months.

Is the STO suitable for me?

To determine whether tokenizing your share capital through an STO is a good idea for you, and to show you what kinds of things are involved, we have inventoried all the relevant questions. These questions are essential, not only to determine whether you should tokenize but also as to how you should do that.

As a quick scan for your convenience, you can take our self-assessment quiz which delivers you a personalized report that gives you some background information, tips, feedback, and advice based on your answers. This will provide you with more clarity on how to proceed. Should you want to discuss further, or you have specific questions to be answered, feel free to contact us.

Wat is KYC?

Letterlijk betekent dit: Know Your Customer.

Het Know Your Customer (KYC) principe – ook wel Customer Due Diligence of CDD genoemd – schrijft voor dat een financiële instelling zijn klant goed moet kennen voordat deze als klant wordt geaccepteerd. Voordat iemand een rekening kan openen, een beleggingsproduct kan afnemen of een hypotheek of lening kan afsluiten, moet hij geïdentificeerd en gescreend worden: wie is deze persoon, van welk land is hij fiscaal inwoner, kan hij een risico vormen, wat zijn de intenties met het af te nemen financiële product?

What about compliance?

A Security Token Offering is compliant with existing regulations in the Netherlands. Proper KYC checking (Know Your Customer) is done plus when people trade between wallets this will be handled through a custodian. The Liqwith.io technology interfaces with the relevant KYC, Custodian platforms to make this happen.

What if I only want 2-5 shareholders?

Where there are between 1 and 10 shareholders, tokenizing offers too few advantages. An STO is particularly advisable if you expect to have more than 10 shareholders.

Is this (only) a method to attract foreign capital?

One can use a Security Token Offering to attract foreign capital, but this is not the only reason. One can even desire to do an STO without wanting to attract foreign capital.

An STO is also an instrument which allows staff, suppliers and/or clients to participate. In that case too, tokenizing is a good idea, because managing your security tokens on the blockchain will save you an awful lot of time and administration costs.

Can you help me in writing an investment memorandum?

Sure, we are happy to help. Don’t underestimate the amount of work involved in writing an investment memorandum or white paper. We can offer you a blueprint for the set-up. If so desired, we can review and assess your document. That way you will know for sure whether it meets the information needs of investors. They are naturally interested in your expectations but will certainly also pay close attention to a realistic analysis of the risks.

What is a Prospectus Regulation (EC)?

The prospectus requirement determines with which conditions you must comply if you wish to sell a financial product to the primary market; the consumers. The regulations can be found on the website of the AFM (the Netherlands Authority for the Financial Market). One such condition is that you may acquire no more than 5 million euros in a 12-month period from private investors, without submitting a prospectus approved by said AFM. We recommend you think carefully about these regulations beforehand so that you can take them into account when making your STO plans.

Can you show me how the tokens managed in the portal and wallets?

In the near future, we plan to upload a demo video and/or screenshots so you can have a look behind the screen.

We are happy to give you a live 1:1 demo via the internet. Feel free to reach out and contact us with your questions.

Can you help me doing an Initial Coin Offering (ICO) too?

We sure can! Liqwith is experienced in ICO’s as well as STO’s, so both utility tokens and security tokens. Feel free to reach out.

What are some of the biggest benefits of a Security Token Offering (STO)?

Trading company shares will be so much easier and cheaper. Lead times for a share transaction will be reduced from 35 days to 3 minutes. The cost per such transaction will be reduced from 1500 euro to 1.50 euro. This opens up new possibilities far beyond ‘just’ company shares.

For companies, it’s a significant cost saving compared to lending, it avoids the risk of long lead-times to find venture capital and eliminates the risk of one intrusive venture capitalist that takes too much control and eliminates the entrepreneurial strength.

For investors, this is a solid and secure investment, because they actually receive the right to shares in a company or tokenized property.

Feel free to contact us in case you can’t find the answer to your question.

Talk with an advisor

Ecosystem of tokenized securities in the Netherlands

A 42 minutes fintech interview with Board member of Bancor and founder of Liqwith, Roel Wolfert. In this video, we discuss features of tokenized securities in the Netherlands and talk about the present and future of DeFi (decentralized finance).

Learn why this started in the Netherlands, and how this attracts international attention. More and more organizations discover how to benefit from the agility and robustness of blockchain technology. Get inspiration from the examples mentioned in this discussion.

Ecosystem of tokenized securities in the Netherlands: Who are the participants?

What companies does tokenization work for?

What are the success factors for a security token offering?

What should be done for tokenization to go mainstream?

Thoughts on the present and future of DeFi

Current activities, interesting projects and clients

Is an STO the way forward for your organization?

Find out in 4 easy steps that should take only 15 minutes.

Enter your name and contact information.
Answer 40 questions about your organization.
Download your free personalized STO Readiness Report.
Discover exactly when and how an STO is of value to you.

Start your STO Readiness Check

News & Media

Crypto Delta launches new initiative for capital markets innovation

Crypto Delta is a unique collaboration initiative aiming to build an ecosystem for the issuance of digital, blockchain based, assets to create an internationally favourable environment for companies that want to issue digital assets in the Netherlands. he key to this is a shared vision and collaboration between all stakeholders (industry, SME, start-ups, advisors, VC’s, etc.) to instil trust and deliver sustainable innovation that is required for a stable ecosystem.

Future of Capital Markets

This position paper is the work of more than a year of research and discussion between Liqwith and Chaintip. The result? A proposal for a new ecosystem in the financial world. Our goal is to bring together new technologies and traditional financial parties in the Netherlands.

Dutch eBook about crypto financing for start-ups in the Netherlands

Free e-Book (in Dutch) about cryptofinancing as for start-ups in the Netherlands written by Herman Vissia, CEO ByeleX, The Next Innovation Company.

VissiaVisie Podcast: Blockchain

What problems are “crying out” for blockchain? What does the better world look like in which money flows are not, or at least much less, controlled by governments and banks? Can you genuinely get rich with bitcoin? This Dutch podcast addresses these questions and more.

Podcast VissiaVisie April, 17th 2020

This Dutch podcast is the first part of the new series of podcasts that connect technology and current events. Herman Vissia speaks with Hans van Willigenburg.

Interview with Herman Vissia on the BNR Podcast

Our first STO story (at the moment referred to as an IPCO, short for Initial Public Coin Offering) at BNR during the Cryptocast of Thursday 31th of may. We had the opportunity to promote this technique to our first customers and to tell more about ByeleX, The Next Innovation Company.

Get in touch

Want to get in touch? We’d love to hear from you. Here’s how you can reach us…

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EINDHOVEN OFFICE, High Tech Campus 32, 5656 AE Eindhoven, Room 3.304

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+31 165 33 22 44

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info@liqwith.io