Liechtenstein-based blockchain startup edeXa has launched one of the first STOs in Europe. The company has decided to launch in Liechtenstein for regulatory and strategic reasons. The STO will provide valuable lessons for other startups that are getting ready for their own token sales.
Daniel Kohler, CEO of edeXa, is certainly no newbie in the digital marketplace. For the last 20 years, he has been working on digital supply chain management solutions.
With his blockchain venture edeXa, he is breaking new ground. The company has launched one of the first STOs in Europe.
“An STO is similar to an IPO,” explains Kohler. But STOs are also suitable for smaller businesses, while IPOs usually require multi-million-dollar investments.
The Liechtenstein-based blockchain startup is working with Liechtensteinische Landesbank and Nägele lawyers in Vaduz. The STO is fully compliant with Liechtenstein law.
edeXa provides blockchain-based supply chain solutions
edeXa provides businesses with blockchain-based supply chain solutions, which are offered as Blockchain-as-a-Service and can be integrated in existing business processes.
The company was founded in Vaduz in October 2018. It’s a spin-off of Liechtenstein-based io-market AG, a software manufacturer and service provider in the areas of digitization and e-Business processes.
Thus, edeXa combines the supply chain technology of io-market and its own technology, which is based on the Hyperledger platform. The value proposition of edeXa’s solutions is high automation, enhanced transparency and improved security.
Hardcap at 5 million CHF
edeXa’s security tokens are blockchain-based non-voting shares. Investors will receive dividends, but no voting rights.
During the STO, edeXa issues security tokens worth a combined 150,000 CHF. Tokens worth 50,000 CHF have already been bought by io-market AG. The remaining 100,000 CHF are split over 100 million tokens.
During the initial STO stage, 20 million tokens will be issued to EU-based investors. Currently, one token costs 0.28 CHF. 3 million tokens have been sold pre-STO to various shareholders of io-market and friends of edeXa.
For now, the total STO volume is capped at 5 million CHF. If edeXa raised a higher amount, it would have to meet additional regulatory requirements. Hence, 80% of the tokens will remain in edeXa’s corporate wallet. At least for now.
Liechtenstein offers strategic advantages
edeXa has selected Liechtenstein as a base for its STO. The government will introduce the Blockchain Act within the first quarter of 2019 and thus lay the foundation for the future of blockchain-based fundraising.
CEO Daniel Kohler explains that one of the main objectives of the new law is to protect companies as well as investors. It will create legal certainty and enable businesses to integrate more smoothly with the financial industry and the traditional economy.
Besides favorable legislation, Liechtenstein’s Financial Market Authority (FMA) is generally supportive towards the blockchain sector. Smooth cooperation with the FMA was also key during edeXa’s STO. All documents were reviewed and accepted by the FMA, which means the STO is fully compliant to Liechtenstein law.
“We at edeXa are pleased about the official audit of the Token Sales by the Liechtenstein Financial Market Authority (FMA). This strengthens the confidence of investors and business partners in our processes,” reads an announcement on the edeXa website.
Secondary market for security tokens is already in the making
CEO Kohler banks on the future of security tokens as an investment vehicle. While there is still no secondary market for security tokens, this will change in 2019, says Kohler.
He might be right with his predictions. The leading Swiss stock exchange has announced the launch of SDX, the first fully-integrated digital exchange in Switzerland. It will also enable investors to trade security tokens.
The Liechtenstein Cryproassets Exchange (LCX) has just increased its nominal capital from 100,000 CHF to 1,000,000 CHF in order to fulfill the requirements of the Financial Market Authority (FMA) to be able to trade security tokens.
STOs are the future of blockchain-based fundraising
STOs come with a variety of advantages. Investing in tokens is easier and cheaper compared to stocks. There is no need for a bank or broker, investors only need a digital wallet. Thus, transaction costs are lower, and fees can be avoided.
Daniel Kohler says, “I spoke with many entrepreneurs who said they will also launch their STOs soon.”
Frank Wagner is the CEO of INVAO, another Liechtenstein-based blockchain startup which is currently undertaking an STO. He agrees that security tokens will play a fundamental role in shaping the future of financial markets.
“Security tokens have the disruptive ability to represent the ownership of an asset with the capability of being traded for fiat currency or an alternative cryptocurrency on global security token marketplaces and exchanges. The promise of global liquidity is an invaluable trait of security tokens,” wrote Wagner on Nsdaq.com.
Companies like edeXa and INVAO are early movers in a market that is still in its infancy. But looking at the potential of security tokens, taking the risk could pay off big time.
Philipp Sandner, professor at the blockchain center at Frankfurt School of Finance & Management, says, “I’m slightly exaggerating, but in a few years STOs might replace the German stock exchange, destroy the business of settlement and custody providers such as Clearstream and replace one third of capital markets transactions.”
edeXa’s STO is one of the first STOs in Europe. It sets a precedence and there will be lessons to be learned. It’s well worth watching.
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