20|30, an innovative venture studio, has become the first UK company to successfully complete the tokenization and issuance of their equity as part of the UK Financial Conduct Authority’s (FCA) Sandbox 4, in collaboration with London Stock Exchange Group.
The test issuance was executed by TokenFactory, a capital raising platform and the first of our portfolio’s products to go to market. This test happened in partnership within tech company Nivaura, who acted as custodian for the offering. Nivaura recently raised £20 million in a seed funding round led by London Stock Exchange Group. Other investors in Nivaura include leading law firms Allen & Overy, Linklaters and Orrick.
London Stock Exchange Group participated in the test issuance by sending settlement instructions to a public blockchain via 20|30’s platform which is powered by Nivaura technology. The test therefore demonstrated connectivity between a regulated trading venue, the Turquoise Plato™ platform, and a public blockchain infrastructure.
An Equity Token Offering (ETO) is a hybrid investment model combining advantages of an IPO, an ICO, and a VC round. According to expert Milan Reder, “equity Tokens guarantee crucial equity-like rights for the investors and the issuers. The process and advantages for potential investors are exactly the same as on a traditional stock exchange including a payout of a dividend and legal protection of the investors and issuer similar to classical forms of VC investing.” Besides, the whole process is transparent and legal, and save quite an amount of time and money for both investors and issuers.
Founder & CEO of 20|30, Tomer Sofinzon, spoke about the innovative impact of this new financial instrument:
“We have succeeded in what we hope is the first step in reinventing capital markets. By tokenising our own equity at 20|30 through TokenFactory, we can demonstrate that there is a far better way to unlock the value of equity, built on innovative blockchain technology which will transform the way companies raise capital,
“Tokenisation will unlock value in a whole range of assets, from existing shares to new issuance, bonds, property, IP, fine art and much more.”
As a regulated, full-service fundraising machine, TokenFactory empowers investors with greater access to investment opportunities and to liquidity, while companies can raise capital more cheaply than traditional methods and in a time-efficient manner. TokenFactory will tokenise equity in a way that is compliant with UK laws and regulations. This is one of the few models of tokenisation that can be scaled with ease, and differs from digitised uncertificated shares, an approach adopted by a number of other companies that does not necessarily provide the same legal certainty.
The test issuance was executed within the FCA’s Sandbox Cohort 4. Upon the closing of this issuance and initial funding round, TokenFactory will aim to remove its Sandbox restrictions to be a fully authorised MiFID investment firm able to arrange the issuance of equity tokens by global firms launching issuances in the UK.
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.