Horizon Globex, a SaaS business specializing in the development of proprietary blockchain software solutions that address the full life cycle of a digital securities offering (DSO), has announced the launch of its Rescission Software Solution to help issuers remedy a non-compliant token offering.
Globex President, Mark Elenowitz, presented the solution to regulators and legislators at the “K&L Gates Dialogue with the Regulations Forum” held Thursday, April 11th in Washington D.C. Globex’s existing software suite works to bring an issuer’s token offering into compliance with securities law and exchange non-compliant tokens in consideration for newly issued compliant tokens.
The SEC has maintained that many of the recently conducted DSOs, commonly known as security token offerings (STOs), likely meet the definition of a “security” and thus fall under the SEC’s jurisdiction. Since then, any “self-reporting” token issuers taking prompt remedial steps in cooperation with the SEC has led the Commission to forego imposing civil monetary penalties.
Globex’s blockchain software solutions address the rescission needs of a “self-reporting” token issuer pursuant to working with their counsel to file the appropriate regulatory filings and execute the following process:
- Old tokens are returned in consideration for new tokens via a new smart contract
- A white-label KYC/AML app is created for issuers to onboard & re-verify investors
- New tokens are custodied by registered Transfer Agents to ensure proper control and records of investor identities and to protect the onward sale of securities
- New tokens are moved from custody to a regulated ATS for compliant secondary trading
[perfectpullquote align=”full” bordertop=”false” cite=”Globex President Mark Elenowitz” link=”” color=”” class=”” size=””]“It was a great feeling to present what Globex has developed these past two years to a room of regulators and legislators who showed great interest in the technology built to solve for key regulatory concerns as it pertains to digital securities. We encourage issuers and law firms that are active in the digital security space to reach out to us to help come into compliance.”[/perfectpullquote]
[perfectpullquote align=”full” bordertop=”false” cite=”Brian Collins, CEO of Globex” link=”” color=”” class=”” size=””]“We’re already beginning to see the aftermath of the regulatory environment catching up with the explosive growth of token offerings. It’s more important than ever for issuers to look at their offerings and take actionable steps to verify compliance regarding issuance, KYC/AML, and secondary trading. We’re proud to provide issuers with a ‘compliance re-do’ button to fall back in line, do right by their investors and avoid costly enforcement from the regulators.”[/perfectpullquote]
Globex has published a blog to help issuers determine whether their past or upcoming token offering is or was compliant.