What is a security token offering?
Security token offerings offer entrepreneurs a way to raise funds using blockchain technology.
This solution enables projects to be funded in a secure environment (through a series of controls relating to the identity of issuers and investors, as well as the transactions and assets involved) without intermediaries.
It is a mechanism that opens up new development opportunities for businesses that do not have access to the traditional funding market.
How do you conduct a security token offering?
To conduct a security token offering, you must obtain administrative authorisation in advance, in the form of a certificate, according to the conditions stipulated by sovereign ordinance.
Authorisations are issued by the Minister of State following receipt of a reasoned opinion from a commission responsible for reviewing the application. The commission issues its opinion following receipt of the documents that make up the application for a certificate. For more information, please see the procedure on conducting a security token offering.
Projects will be subject to a detailed review, with a focus on four aspects:
- Financial viability
- Robustness of the initiative
- Impact in terms of creating wealth for the Principality
- The values of sustainability and responsibility
Conditions relating to token issuers
Applicant companies must fulfil the following obligations, prior to a detailed review:
- The managers and shareholders or partners of the applicant company must comply with good character and legal requirements
- Companies must be registered in Monaco (certificate applications may be submitted by companies in the process of being set up)
- Where tokens share the characteristics of financial instruments, the offering can only be conducted by a joint-stock company
- A mechanism to monitor and safeguard the funds raised during the offering must be set up, with sufficient guarantees to ensure reliability, operability and efficiency
Conditions relating to token offerings
To receive authorisation, security token offerings must comply with the following conditions:
- The denomination per unit must be at least €10,000
- Private security token offerings must be addressed to investors who are purchasing tokens for a total price of at least €100,000 per investor and per separate offering
See the procedure: How to conduct a security token offering