Security tokens are the newest wave of blockchain-based innovations to traditional financial products. With the launch of investorID, a decentralized application for identity verification, crypto users can now create an on-chain identity in order to access and trade tokenized securities in a legal and compliant manner.
In a press release, Tokeny, the startup behind investorID, said that the new dApp aims to solve the regulatory challenge of verifying the identities of potential token holders. Through investorID, investors can create a single, reusable identity in order to participate in Security Token Offerings (STO’s) or manage their current security token holdings.
Users will also have complete control over their data, and can open and restrict access to it as they deem necessary. The application also features an easy recovery process, so that users can never lose their identities or the assets tied to them.
Perhaps the most significant aspect of the new investorID app is that it is compliant with securities regulations. In a statement, Tokeny CEO Luc Falempin said:
“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.”
Protection for both investors and issuers of security tokens is necessary for STO’s to gain public traction. With the advent of new, decentralized on-ramps for purchasers to safely acquire tokenized securities, startups may be able to benefit a new source of venture capital that directly leverages blockchain technology.
The author is invested in digital assets.