Corporate Finance News

Jeudi 23 Janvier 2020

First regulated Real Estate Fund tokenized

The Zug-based Blockchain company Token Factory has developed a secure and scalable tokenization solution powering the first regulated real estate fund in Europe. The FMA (Financial Market Authority Liechtenstein) has recently authorized it as an Alternative Investment Fund (AIF). As a technology partner, Token Factory developed the solution in cooperation with Bank Frick.

Blockchain is no longer limited to crypto-currencies such as Bitcoin or Ether: Based on the Ethereum Blockchain, so-called security tokens can be created to digitally represent various assets. In March 2019, Token Factory in Zug became the first blockchain provider to tokenize a property in Switzerland, using its blockimmo platform. In the meantime, the start-up company supports other companies in tokenizing projects that are to be announced soon. A security token is a digitalised form of an asset.

More than just an announcement

In the Blockchain industry, new tokenization projects are planned and announced over and over again. However, many are struggling to implement and execute them effectively. This first real estate fund in token form has already been authorized by the Liechtenstein Financial Market Authority (FMA). It is the first regulated tokenized AIF fund in Europe.

An important prerequisite for approval by the FMA was proof of the security of the code. This was provided by an external audit firm (ChainSecurity).

“Our tokenization solution is based on standard protocols like ERC20 and an open Blockchain (Ethereum). This allows our customers to maximize the potential of Blockchain technology without having to commit to a central technology partner or proprietary (closed) solution.” Bastiaan Don, Managing Director of Token Factory.

This is possible because Token Factory transfers the ownership of the smart contracts and instructs the appropriate people how to use the solution independently in the future. Additionally, Token Factory shares its existing blockchain know-how with its customers and is actively involved during the implementation. The solution can also be easily integrated into existing applications (like CRM) and processes (like Anti Money Laundering / Know Your Client (AML/KYC).

The technology provider’s solution

The Security Token is linked to an on-chain whitelist: this means that only compliant transactions can be processed. Only investors who have identified themselves via AML/KYC will be able to invest, hold or trade in the corresponding security token. The solution built on the Ethereum Blockchain will serve as a basis for rule enforcement and secure documentation of ownership rights. The whitelist is, in this case, controlled by Bank Frick, which guides the investors through the onboarding process and includes them in the whitelist if all information is complete and the source of funds is sufficiently plausible. The same subsequently applies to the token minting process.

“As the preferred point of contact for Blockchain Banking, we were again able to demonstrate the possibilities of Blockchain technology with the tokenization of a regulated investment fund. The issuance of digital, Blockchain-based fund shares leads to greater efficiency and a higher degree of automation in the transmission process.

While evaluating possible technology partners, we were impressed by Token Factory’s team, their track record and their far-sighted and understandable tokenization solution.

We are pleased to take this step to further strengthen our service offering in the issuing business and are confident that we have set an important milestone for future developments.”
Raphael Haldner — Head Fund and Capital Markets of Bank Frick

About Token Factory Switzerland Ltd.
Token Factory Switzerland Ltd (“Token Factory®”) is a Blockchain-based start-up that is on the verge of becoming the preferred provider for asset tokenization. The legally compliant tokenization solution enables fractional investment and ownership, all assets are officially and legally represented as security tokens on the public Ethereum Blockchain. The company works with financial institutions and other strategic partners in different countries to enable and expand the cross-border market. Operating out of Switzerland, Token Factory focuses on bringing asset tokenization to the masses, ultimately leading to a much more efficient global asset trading marketplace.


Lisez gratuitement le quotidien Finyear & sa newsletter quotidienne.
Recevez chaque matin par mail la newsletter Finyear, une sélection quotidienne des meilleures infos et expertises en finance digitale, corporate finance & crypto finance.

Read for free The daily newspaper Finyear & its daily newsletter.
Receive the Finyear's newsletter every morning by email, a daily snapshot of the best news and expertise in digital finance, corporate finance & crypto finance.


Chaineum :
Chaineum est une banque d'affaires offrant une expertise de premier plan en matière de financement, levée de fonds, M&A, ICO et STO, avec une vision stratégique orientée tant vers le métier de ses clients que vers la technologie blockchain. A ce titre, Chaineum a participé à la mise en œuvre de bonnes pratiques dans le secteur (ICO Charter, Security Token Network).

About Chaineum:
Chaineum is a Independent Investment Bank with a strong expertise in funding, fundraising, M&A, ICO and STO, and a strategic focus on both its clients' business and blockchain technology. As such, Chaineum paved the way in the implementation of certain best practices in this sector (ICO Charter, Security Token Network).


No Offer, Solicitation, Investment Advice, or Recommendations

This website is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security, nor does it constitute an offer to provide investment advisory or other services by FINYEAR.
No reference to any specific security constitutes a recommendation to buy, sell or hold that security or any other security.
Nothing on this website shall be considered a solicitation or offer to buy or sell any security, future, option or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction.
Nothing contained on the website constitutes investment advice or offers any opinion with respect to the suitability of any security, and the views expressed on this website should not be taken as advice to buy, sell or hold any security. In preparing the information contained in this website, we have not taken into account the investment needs, objectives and financial circumstances of any particular investor.
This information has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this information and investments discussed may not be suitable for all investors.
Any views expressed on this website by us were prepared based upon the information available to us at the time such views were written. Changed or additional information could cause such views to change.
All information is subject to possible correction. Information may quickly become unreliable for various reasons, including changes in market conditions or economic circumstances.