# TOKEN2049 - STOs and Security Tokens - Daniel Skowronski (DX.Exchange)

- Channel: [TOKEN2049](https://streameth.org/token2049)
- Date: 2019-10-09
- Watch: https://streameth.org/watch/yt-l0UEzEOLry4
- YouTube: https://www.youtube.com/watch?v=l0UEzEOLry4

## Transcript

for you those who you don't know DX exchange is a digital asset exchange now everybody in crypto seems to call themselves a digital asset exchange but we consider ourselves a true digital asset and what I mean by that is yes of course we offer cryptocurrency trading but one of our big claim to fame x' is we've done digital stocks we tokenized Apple and Amazon which I'll talk about in a second and then we've also done digital ETFs and what I'd kind of like to know is who here has invested in an IC oh okay and who here has actually ever purchased a digital stock how about a real-world stock okay so one of the things that we were able to do is through our regulations where he you regulated we're our matching engine technology is built on NASDAQ we partner with Bloomberg through their media so we're based out of you but we can accept Asian clients we don't accept us clients unfortunately not right now but what we've done is we've been able to actually tokenize Apple and Amazon and Google and a number of ETFs they're out there like QQQ or SP Y and we've done this so that there's two big advantages that but that happens is one is you can now trade 24/7 on these and two you can actually do fractions of stocks and what is the fraction of stocks mean to mean to you well think about it from the the third world kind of point of view it's like in Indonesia for example in Indonesia they're the third largest of Facebook users but the stock ownership is practically zero there's two reasons for that one it's really hard for them to get an account or on board and number two is they maybe can't afford 140 160 dollar stock but now with DX they can come on board using a very easy onboarding system and now they can actually purchase facebook for as little as $10 and what this is kind of done is now you guys have heard the term bang bang ball we're kind of coining the phrase trade the untradable so suddenly the bottom billion around the world now have an opportunity to build real wealth now you might be thinking what does it really matter some guys gonna buy $10 worth of you know Facebook stock and maybe it's worth 50 dollars in a year or two years but the point is as you think about that and spread it across millions of people that's real wealth that's being created that wasn't there before and that's a lot of money for these people so this is some of the the really cool stuff where we at DX feel like we're starting to kind of try to bridge that gap between the old world and new world we really believe that the world is going to be tokenizing everything whether again that's real world stocks whether that's security tokens whether that's real estate or whether that's maybe like a piece of work or a piece of art so I have a question has anyone here purchased a security token or invested in a security token one Wow amazing which which security token did you invest in okay very good all right surprising usually I get no one but again that's one person here that's invested in security token and you know one of the things is is again it's so much talk is about security token security tokens and the thing that I find that that's hard for even for myself or the investors I speak to is what they're afraid of is where is the liquidity going to come from right and yes there's companies like t0 and and you know open finance that are trying to do some things but you know really when you look at it the the user experience isn't so great but @dx being this digital asset exchange I'm basically proud to announce today that now we will be launching security token trading for secondary market on the exchange and what is that going to look like well potentially it could look like something like this let me back up for now like this okay so this is an example of someone who wants to sell their security token on the exchange you've heard of by Nance doing there by Nance Labs it's called initial exchange offering well we can do an SEO here our security exchange offering so as an example I GWT they want to go ahead and sell 18 million dollars which is the three million in tracked tranches they're basically in the first one at 72 70 cents or a 30% discount somebody can come to the exchange and start purchasing the token right from the exchange and they can sell them in tranches and if you look didn't once that one tranche is sold out it goes to the next one it's very very simple very easy once this is sold out this will then just turn into a bid offer so what you'll start to see on this side is just a bunch of bid and offers so people can actually trade liquidity right away right so this is within our platform and just to explain how the platform works there's three levels a customer comes in at basically the first level is for everybody anyone can come in they basically do their basic ky caml and that gives them access to the cryptocurrency and that's in the first tab you see in the far upper left hand corner the second tab if they click on that there's going to be a little bit more information that we need to click for them so that allowed them to actually then trade the digital stocks the digital ETFs and then the final third tab the screen that you're seen here on the security token side well this one here you need to be a professional investor under EU regulation that's very similar to an accredited investor under US rules but it's a considered a professional investor under EU and again there's some more information that we're going to need to collect but once you get it you're going to be able to access the marketplace for the security token offering so as of literally right now anyone who has done in sto anyone who's thinking of doing sto can come to our website now get listed onto the exchange to get their token to start trading or even come and start talking to us and how potentially DXM can help them raise money as well if you need any other information you can take a picture of this you can contact me directly you can contact our our staff and also I'm available here in the backroom to speak to anyone as else as well oh and we have some questions I'm happy to do questions yes are you based in Europe I meet you d do you have a license that allows you to market your exchange to retail investor ok so again our exchange is marketed to everybody however to gain access to the security token offering you will need to have the go through some approvals to be identified as a professional investor and yes of course we have the licensing proper out of the EU regulation you know look one thing I want to make a point on is when people are talking about stos it's really really us-centric us-based right what does the SCC doing and everything else right which you know we we got to remember that the world is a bigger place than the SEC right and under EU rules there's a lot more flexibility to allow us to be able to do these types of products my understanding is that if you market this right into Hong Kong investors with our license to consider be criminal offense okay but again we have the licensing to be able to do what we need to do and the under your regulations so we have the licensing I'm happy to discuss it with you more I'm sorry and we can do you in Asia we have the licensing for both yes sir hey so what's the difference between this and let's say in the UK we call it spread betting or contact for differences where I can't actually bet on the share price of a stock with a small amount of money using platforms like IG index mhm so what what's the difference between that and your tokenized Apple okay so we're talking about the digital stocks so actually a great question so that was one of the ways we were able to actually tokenize Apple and Amazon is we basically created a derivative product under the method and yzma rules in the EU so it's very similar to a CFD okay I came from that industry and that's how I was able to think you know how do we get this one foot in and one foot out when we actually announced it in January everybody was calling it an Sto but actually it wasn't you know we'd even say that it was an sto it's actually a derivative derivative product but what's really great about it is the regulatory body that we did this under which is çiçek in the EU they they they really love this product better than a CFD because if you know on a CFD side number one its leverage product cars is not and number two is there's all these interest and carrying charges be able to have underneath it ours acts more like a stable coin each share of Apple that is purchased as a digital share is backed by a real-world share and if a fraction of a share is purchased the market maker will round up and buy a whole share and all the shares are basically audited by KPMG and to make sure that every share is backed up for each token okay yep right here I have like actually two questions one is um how are you solving the method problem so for investors and the second one would be how are you handling the Prospectus of the sto tokens offerings I didn't hear the first part the method classification of your investors the method mystery and here the first part institutional investors know so as as in Institute as an investor who goes in the space you have in Europe you have the me fit profile so certain investment products are not allowed for every investor so the question is how are you categorizing your users in regard to the method regulation right okay so as I mentioned to answer your first part is when you click on in the tab the security tokens a pop-up comes up and basically we have to qualify you through collecting more information understanding who you are how are you a professional trader and these are based exactly questions from that method to regulation if you don't pass you don't get access okay you have to pass to be able to get access to the security token marketplace in terms of your second question which was the prospectus okay once you do gain access to the marketplace if I go back real quick if you notice here call it white paper offering everything everything is right here for the investor so they'll be able to see all the information that's built around that security token so they'll have weather access to the prospectus the white paper the team all the information that's required for them that they need to understand is this a good investment for them or not okay yep in the back hello thanks for your presentation I just want to ask you are you ready to list is Tio's now or what is your time frame for that we're ready to start today there's no ten minutes ago it's perfect anymore this is great I didn't know that people are gonna ask questions is the kid over here it's the last show of the day so we got to get this out of our system thanks lovely presentation so is this only for equity based stos or for other financial instruments as well so you mean you need like for example instead of just equity maybe it's a profit share or something like this yeah bonds or something absolutely look if you want to come to us even with a real estate or you want to come to us who they tokenizing art will we'll be able to do it so it's not just limited to equity you know the most important thing is is that you know as long as it's classified as a security the license that we have is to be able to do transferable securities so anything that's transferable as that's classified security whether again it's art profit sharing equity we have the license to be able to do it interesting question in terms of the digital stocks you can but your wallet has to be white listed and I believe so for the same thing for the security token honestly my I haven't been briefed on that but I believe it's under the same thing that you can with the digital stocks and and just yeah yeah black we should maybe consider block pass to make sure anyone else they keep trying to cut me off but I'm happy to talk to you guys does everybody understand by the way the white listed what that means some have been saying no just so you understand on the digital token so for example you could buy Apple alright in a digital format and you can put it into your my aetherium wallet they're trying to cut me I know but what that means is is we white list your wallet and then and then what will happen is you can't transfer that to somebody else unless they also have a whitelist or wallet there's two reasons for that one we basically need to track where those tokens are so that in case there's a corporate action like a dividend or stock split we need to know where that money needs to be sent and to for example we don't take us customers right so we need to make sure that you don't transfer that to a u.s. customer as well or somebody in a jurisdiction that's not allowed to trade a derivative product right look I'm gonna be in the back room if anybody else has any other questions I'm happy to talk to you happy to talk to you about more regulation if need be but thank you very much everybody