Tokenized Securities Company Will Start Crowd Sale in November
DESICO has announced plans to launch its own security token offering (STO) of DESI tokens, adding to the growing trend of tokenized securities in a maturing blockchain industry.
As a member of the EU possessing all regulatory licensing, DESICO’s STO will be fully compliant with the necessary laws. DESICO initially intended to release a utility token ICO because of regulatory hurdles. However, it can now launch its own STO after acquiring the necessary financial brokerage licensing. This enables the company to issue security tokens for its own platform.
DESICO intends to host the STO on its platform, with an eye toward establishing its effectiveness to the public. This will enable the company to create further openings for potential future clients and run its business on the same model that its clients would use.
“Out of all the security token platforms, we are the ones who are doing our STO the same way that we promise we will do for our clients, who will be eligible to do the same in the future,” Laimonas Noreika, co-founder and CEO of DESICO, said in a press release.
DESICO will begin its STO on Nov. 7 under the regulatory classification of a revenue participation note (RPN). Investors will receive payouts quarterly. While this kind of STO does not grant any company ownership, it does allow token owners to receive 12.5 percent of company revenue. The number of tokens held by investors establishes how much share in revenue they can receive.
DESICO using the RPN security model enables investors to share in the company’s growth and profits without the difficulties of focusing on shareholders rights. DESICO plans to operate under a joint venture with brokerage, crowdfunding, and e-money license holders. In addition, there will be no cap on payouts for investors.
Guidelines Keep Investors in Place
DESICO’s STO will have three stages: presale, crowd sale, and hard cap. The presale stage will begin on Nov. 7 with a cap at $1 million and a price per token of $0.98. The crowd sale stage will start in January 2019 with a hard cap of $5.75 million. Part 1 of the crowd sale will price tokens at $1.07. Part 2 will price them at $1.09. In stage 3, the remaining tokens will be sold to institutional investors at the hard cap price, or $1.15. Payments will be made using cryptocurrencies, which will then be exchanged for euros.
Retail investors must make a minimum investment of $230 but can invest no more than $5.75 million. Accredited investors must make a minimum investment of $143,750 without any cap on maximum investments. Investors must also pass KYC and AML requirements. Only U.S. investors must be accredited according to the law as it stands. DESICO also allows U.S. companies an additional $5.75 million from non-U.S. retail investors in their security tokens. This offers the unique opportunity for projects to access $5.75 million annually from Main Street investors. Meanwhile, most other platforms limit access to institutional and accredited investors on account of regulatory compliance.