On March 25th 2019, Tokeny announced the European launch of investorID. The platform aims to help security token issuers to know which investors are eligible for their offering, while also allowing investors to quickly know which investments they can access.
How investorID Verifies Investor Identity
investorID is a decentralized application that enables investors to compliantly access tokenized securities by demonstrating their on-chain identity.
The platform aims to become the principal solution for investors to verify their identity in the digital asset space and manage their own data.
Security tokens differ from other digital assets by explicitly declaring a securities status— they therefore must abide by existing securities laws. Such is the case in the United States at least, according to Securities and Exchange Commission (SEC) chairman Jay Clayton.
Being able to transparently prove such regulatory compliance, while also maintaining the protection of sensitive investor data, is no simple task. Yet the importance of such a feature is critical for the successful implementation of security tokens.
According to Tokeny CEO Luc Falempin,
“By creating investorID, issuers can act in full confidence that their securities are being accessed and traded compliantly. There wasn’t a solution on the market that accurately identifies the different stakeholders on the blockchain infrastructure, but it is a mandatory piece in order to apply securities laws in Europe.”
The Benefits of investorID Explained
investorID enables security token issuers to quickly know whether or not a specific investor is eligible for an offering. Once investor access is determined, the jurisdiction’s applicable rules and regulations can be automatically enforced.
Investors need to only establish their identity once, as their identity can be reused to access several tokenized securities offerings. In addition, investors are able to manage who sees their information. By having control of their data, investors can restrict access to certain personal details as deemed appropriate.
Falempin went on to add,
“On the buy-side, it’s fundamental for investors to know they are respecting the necessary rules and regulations in relation to security trading. investorID relieves this worry and enables individuals and financial institutions to seamlessly create their on-chain and validated identity. This allows investors to trade tokenized securities in total confidence.”
There is also a system for asset recovery. If an identity is lost in the investorID system, assets linked to that identity can be recovered in a secure manner.
European legislation has been continually progressive in recognizing the blockchain as a legitimate infrastructure to issue securities. Malta, Germany, Switzerland, and Lichtenstein have all seen the compliant issuance of tokenized securities.
What do you think of the European launch of investorID? Will the system become the go-to for on-chain identity verification? Let us know what you think in the comments section below.
Image courtesy of Tokeny.