While the ICO market often looks like a Las Vegas casino rather than an intelligent investment decision, there are some projects, like DESICO, with its Security Token Offering (STO), that aim to both protect its investors as well as providing value to the crypto-space as a whole.
In its major announcement today, tokenized securities startup, DESICO, has outlined the plan to offer its STO, introducing its native DESI tokens.
Welcome to a Secure, Compliant Ecosystem
Over the past few months, the U.S. Securities and Exchange Commission (SEC) has opened the regulatory doors to addressing this space, making it that much more important for companies to adhere to the current regulations in place.
“By raising money via the securities sale ourselves, we are showcasing that our platform to issue and trade security tokens is legally compliant and easy to use. This will demonstrate to our clients how to issue their security tokens in the future.” – Laimonas Noreika, CEO of DESICO.
DESICO, operating in both Paris, France and Vilnius, Lithuania under Lithuanian crowdfunding regulations, is offering a platform that allows for the issuance and active trading of tokenized securities that is in compliance with European Union (EU) member state law.
Born out of the collaborations with Lithuanian regulators, the company’s choice of its location is extremely strategic. DESICO’s business model of issuing and trading tonekized securities has already been endorsed by the Ministry of Finance and the Ministry of the Economy of the Republic of Lithuania.
Regulated Tokenized Securities For Retail, Accredited, and Institutional Investors
By announcing its support in complying with EU member state law, DESICO will help to provide a safe and legally compliant solution for STO investments, something unheard of until now. While there are a number of legally compliant STOs in the market, the biggest advantage DESICO brings, is that it is one of very few made accessible to retail investors.
Pursuant to current laws, only U.S. investors are required to be accredited. However, DESICO allows U.S. companies to add the additional $5.75 million USD from non-US retail investors to their security offering.
While most platforms are limiting access to institutional and accredited investors, DESICO creates an opportunity for projects to access said amount per year from Main Street investors.
Breaking Down the System
The total nominal value of DESICO security tokens emission is set at $44,361,793. Due to the laws applicable to STOs issued in Lithuania, the numerical scale of publicly available tokens for retail investors during the DESICO STO is set at $5,750,000 during the period of November 7th 2018 to November 7th 2019.
The remainder of tokens will be offered to institutional investors at nominal price, while providing a lower price to retail investors. DESICO guarantees that all investors will have the same rights when acquiring DESI tokens.
The DESICO security token offering will be divided into two stages:
- November 7th – November 16th 2018: The DESI security token pre-sale. $1,000,000 hard cap. Discount offered to all investors – 15%.
- January 14th – January 25th 2019: The DESI security token crowdsale. Remainder of the tokens will be offered to investors with hard cap of $5,750,000.
The DESI security token will be classified as a Revenue Participation Note (RPN), with quarterly payouts to investors. This type of security token does not constitute as ownership of DESICO. Instead, token owners will receive 12.5% of the total revenue created by DESICO. The total number of DESI security tokens represents a revenue share of 12.5% of DESICO’s total revenue. The number of tokens held by the investor determines how much of that 12.5% of revenue is paid out to the token holder.
The DESI security token price per-token:
- Pre Sale – $0.98
- Crowdsale Part 1 – $1.07
- Crowdsale Part 2 – $1.09
- Hard Cap Price – $1.15
The minimum investment for retail investors will be $230. Accredited investors will have a minimum investment requirement of $143,750 with no cap on their maximum investment.
DESICO will operate under a joint venture with crowdfunding, brokerage, and e-money license holders. There will be no cap on revenue payouts for token holders.
All investors will have to go through Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures in order to acquire DESI security tokens.