Securrency, a global financial services technology infrastructure company, today introduced the Compliance Aware Token (CAT-20 and CAT-721) standards, an interoperable ledger-agnostic security token protocol.
Security tokens minted with the CAT protocols are self-governing and ensure compliance throughout their life-cycle using Securrency’s regulatory technology. The company’s patent-pending, token key-lock structure ensures that tokens may not be traded or transferred to or from a wallet that does not have the appropriate qualifications.
“We developed the CAT-20 and CAT-721 standards because security tokens should be truly liquid – they should not be limited to one ledger and they should be easy to trade, transfer and regulate. This new protocol will enable speed, efficiency, and transparency for issuers – from Wall Street to Main Street – while meeting compliance at a global scale.”
CAT-20 and CAT-721 tokens can be issued from and transferred across any distributed ledger, including Ethereum, Stellar, Ripple, GoChain, and EoS among others.
Securrency establishes compliance in primary offerings through features such as:
- Individual and entity automated Know Your Customer (KYC) and Know Your Business (KYB) across 160+ jurisdictions, with non-documentary verification available in 37 jurisdictions
- Transaction checks through a Know Your Wallet (KYW) service that automatically proofs and scores digital wallets and associated cryptocurrency
- Automated source of funds (SoF) verification services through an easy-to-manage administration service
- Validation of an investor’s accreditation or qualification according to the jurisdiction
Securrency’s proprietary multi-venue identity services and Rules Engine can ensure that compliance is maintained during secondary-market trading, through on- and off-chain movement and throughout the lifecycle of these security tokens. In both primary and secondary market activity, the attribute-mapped wallet (the “key”) must fit the policy linked to the token (the “lock”) for the CAT-20/721 token to be transferred into a wallet.
The Rules Engine allows for extremely simplified mapping of relevant regulatory and transactional policies to a CAT-20/721 token by an issuer or that issuer’s advisors via a simple, user-friendly interface. In the event of changing regulations or shifting issuer requirements, Rules Engine updates can be applied directly by issuer/counsel to automatically update the handling of tokens in circulation.
The CAT-20 and CAT-721 protocols are fully supported through Securrency’s proprietary Decentralized Investment Banking Services (DIBS), a complete suite of security token issuance and maintenance tools and services that can be easily deployed by investment banks, accessed via Application Programming Interface (API) by developers, and directly utilized by issuers.
In addition, Securrency will make its CAT-20 and CAT-721 protocols available to other security token issuance platforms and service providers to help to pave the way toward global adoption of security tokens to promote capital formation and enhanced global liquidity.
“Security tokens represent a pathway to the successful development of highly-liquid blockchain-enabled capital markets. However, there have been major challenges that stand in the way of mass adoption, including ‘walled garden’ approaches and complicated technical deployment. We believe that the global interoperability of the CAT-20 and CAT-721 protocols, as well as Securrency’s simple and convenient token issuance and maintenance tools, will establish a common standard that can be used by all issuance platforms to support the growth of the security token economy.”