5 Things Investors Need to Know About Security Tokens

Security tokens are not cryptocurrencies or part of unregulated ICOs.Security tokens are essentially digitized traditional securities.

US Securities Exchange Commission Chairman, Jay Clayton, recently stated, "Blockchain technology has incredible promise for securities and other industries." Many in the security token industry feel that it's not too far of a leap to imagine regulatory bodies requiring all future securities to be sold using compliant security tokens.

To comply with this regulatory requirement the security token can be coded so that investors are only allowed to buy, sell, or trade the security token if they have passed necessary KYC/AML accreditation and are considered accredited investors.

Security Tokens have the ability to represent fractional ownership of an asset and to be traded on global security token marketplaces and exchanges - two things that are virtually impossible for traditional securities.

Because the tokens can be listed on global markets, the security can be made available to global investors that are eligible to buy, sell, and trade the security in a compliant way.

SPiCE VC, one of the world's first tokenized Venture Capital funds recently issued security tokens to its investors.

SPiCE VC investors are free to trade their tokens on global security token markets as soon as regulations allow.

Because security tokens are automated, much of these manual processes are unnecessary, making the security token more efficient and accurate.

Just as email supplanted the written letter, we anticipate security tokens will continue to replace traditional securities as the preferred method to issue, trade, and manage asset-backed securities.

With new security token exchanges and marketplaces coming online and a wide variety of tokens to be traded in a compliant way on a global scale, the opportunities for investors will be unlike anything is seen before in the asset-backed securities markets.