With the level of the legal framework and regulatory mechanisms built around the three different layers of United Crowd, the platform can guarantee operations both on-chain and off-chain. As a tokenization network, there are certain steps for issuing a token on the platform.
These steps include:
Examination of the issuer
A thorough analysis of the issuer is the foremost step performed by the United Crowd network when considering token issuance, and they perform this check before the development of a new financial or digital product. Several specific parameters are governing this evaluation and analysis of the issuer, such as the governance and security level of the company, management, and their due diligence. This check helps to ascertain the integrity and reputation of the potential token issuer.
The second step involved concerns the type of financing model the issuer intends to choose. United Crowd has four different types of token models and each has a particular application on the platform. The financial model of tokens includes Asset, Equity, Debt, and Utility.
Configuration of Contracts and Regulations
After the issuer indicates the type of financing token model, which is usually developed on the blockchain through a token, United Crowd decides on how to create a contract and compliance policy that will govern the issuer. The contract mainly contains the rights and obligations of the issuer. This next step activates the sole regulatory provisions, which the issuer strictly adheres, and the legal configurations function alongside this. Certain specific parameters determine how the contract and regulation are drawn, and they are entered into a standard contract of regulation-compliant for the individual contract on which there will be token issuance. These parameters include the nomenclature of the token, the net and nominal value, any pending interest payments and their due date, and denomination. These parameters apply mainly to individual entities, for business purposes, and corporate companies, the parameter differs. It will include the market fluctuations, annual financial statements, level of debt, address, name, and the issuer entry in commercial registration. Some important examples of contracts and regulations include VermAnlG (Asset Investment Act), KWG (Banking Act), WpPG (Securities Prospectus Act), and KAGB (Capital Investment Code).
Emission and Entitlements
After the clear and distinct arrangement and definition of all contracts and regulations, the token issuance takes place. However, there are certain emission procedures the token should follow. The sales of the token should be through a confirmed off-chain validator or important AML or KYC provisions on a smart contract level. The distribution and transfer of the token should be performed to only verified addresses associated with a valid entity. Endorsed users do not need to perform accreditation to receive the tokens; however, new users must carry out the accreditation process. Authorizations for international users should be peculiar to each customer based on their locations. More so, the token issuer will provide the total number of holders, as this is useful for the financial instrument, which investors can purchase by indication via a digital signature and payment of the investment price.
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