Knowledge Base & FAQ

Introducing you to this new world of finance

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General FAQ

What is a Security Token Offering (STO)?

Through the Liqwith.io service any small or medium-sized enterprise (SME), start-up or scale-up can tokenize its shares in a cryptocurrency and bring it to the public market. It can then raise capital in the market from private investors in a security token offering (STO). The company will raise the desired liquidity and will only have to pay out dividends when the investments are paying off. Just as in the regular stock market the company is obliged to report properly and timely on its progress and results. Via an STO up to EUR 5 million can be raised under Dutch law every 12 months.

Is the STO suitable for me?

To determine whether tokenizing your share capital through an STO is a good idea for you, and to show you what kinds of things are involved, we have inventoried all the relevant questions. These questions are essential, not only to determine whether you should tokenize but also as to how you should do that.

As a quick scan for your convenience, you can take our self-assessment quiz which delivers you a personalized report that gives you some background information, tips, feedback, and advice based on your answers. This will provide you with more clarity on how to proceed. Should you want to discuss further, or you have specific questions to be answered, feel free to contact us.

What about compliance?

A Security Token Offering is compliant with existing regulations in the Netherlands. Proper KYC checking (Know Your Customer) is done plus when people trade between wallets this will be handled through a custodian. The Liqwith.io technology interfaces with the relevant KYC, Custodian platforms to make this happen.

What if I only want 2-5 shareholders?

Where there are between 1 and 10 shareholders, tokenizing offers too few advantages. An STO is particularly advisable if you expect to have more than 10 shareholders.

Is this (only) a method to attract foreign capital?

One can use a Security Token Offering to attract foreign capital, but this is not the only reason. One can even desire to do an STO without wanting to attract foreign capital.

An STO is also an instrument which allows staff, suppliers and/or clients to participate. In that case too, tokenizing is a good idea, because managing your security tokens on the blockchain will save you an awful lot of time and administration costs.

Can you help me in writing an investment memorandum?

Sure, we are happy to help. Don’t underestimate the amount of work involved in writing an investment memorandum or white paper. We can offer you a blueprint for the set-up. If so desired, we can review and assess your document. That way you will know for sure whether it meets the information needs of investors. They are naturally interested in your expectations but will certainly also pay close attention to a realistic analysis of the risks.

What is a Prospectus Regulation (EC)?

The prospectus requirement determines with which conditions you must comply if you wish to sell a financial product to the primary market; the consumers. The regulations can be found on the website of the AFM (the Netherlands Authority for the Financial Market). One such condition is that you may acquire no more than 5 million euros in a 12-month period from private investors, without submitting a prospectus approved by said AFM. We recommend you think carefully about these regulations beforehand so that you can take them into account when making your STO plans.

Can you show me how the tokens managed in the portal and wallets?

In the near future, we plan to upload a demo video and/or screenshots so you can have a look behind the screen.

We are happy to give you a live 1:1 demo via the internet. Feel free to reach out and contact us with your questions.

Can you help me doing an Initial Coin Offering (ICO) too?

We sure can! Liqwith is experienced in ICO’s as well as STO’s, so both utility tokens and security tokens. Feel free to reach out.

What are some of the biggest benefits of a Security Token Offering (STO)?

Trading company shares will be so much easier and cheaper. Lead times for a share transaction will be reduced from 35 days to 3 minutes. The cost per such transaction will be reduced from 1500 euro to 1.50 euro. This opens up new possibilities far beyond ‘just’ company shares.

For companies, it’s a significant cost saving compared to lending, it avoids the risk of long lead-times to find venture capital and eliminates the risk of one intrusive venture capitalist that takes too much control and eliminates the entrepreneurial strength.

For investors, this is a solid and secure investment, because they actually receive the right to shares in a company or tokenized property.

Feel free to contact us in case you can’t find the answer to your question.

Talk with an advisor

Investor FAQ

How do I buy shares?

Buying digital shares (or security tokens) is very easy and you can buy them with Bitcoins, Ethereum, iDEAL, and credit transfer.

What benefits do security tokens have over utility tokens?

Investing in an ICO does not result in you having an ownership stake of the company you’re giving money to. Also, an ICO is barely regulated, particularly in comparison to an IPO or STO.

Investing in an STO through buying security tokens means you then possess actual company shares with all associated rights.

Why do I need an Ethereum address?

The shares are tokenized and built on the Ethereum platform.

Where can I store my shares?

You can store your shares in your Ethereum wallet. We provide you automatically with such a wallet but you can also use your existing wallet via MetaMask or Ledger Nano.

How do I backup my wallet?

Every wallet has its own way to back-up your private keys. A private key is basically a unique cryptographic key with which you can prove that you are the owner of the crypto wallet and thus the funds which are stored under that account. It is very important that you back-up these keys on several USB sticks or maybe a paper wallet so you can recover easily after a system crash. Check the manual of your wallet of preference.

How do I secure my wallet?

When you install a wallet on your PC, MacBook or phone, the first thing you should do is protect your wallet with either a code or/and a passphrase. This is critical, and this step should not be skipped. In the more modern wallets the software of the wallet will provide you with 12 words (BIP39, Mnemonic code for generating deterministic keys). These words need to be written down somewhere and be kept safely from harm, including from fire or other unforeseen risks. Check the manual of the wallet of your preference.

What is a paper wallet?

A paper wallet is document which contain the cryptographic keys which are unique for a digital crypto wallet. The keys are normally depicted as QR codes together with the real keys.

What is a hardware wallet?

A hardware wallet is, besides being almost the same as a traditional crypto wallet, a device which holds one or several cryptocurrencies. The cryptographic secrets are protected by a secure chip. It is basically a small computer that handles your transactions in a safe and secure way.

Can I make payments directly from an exchange?

No, this is not possible.

When will I receive my share tokens?

After the STO is finished, we will need some time to manually process the different payment channel orders, to sort out the token allocation. Once this is done, your shares will be distributed to the specified Ethereum address.

How can I see my tokens?

Download our custom token viewer “Liqwith Explorer” on your smartphone via the Google Play Store or Apple I-store and simply add the address of your Ethereum Wallet

News & Media

Future of Capital Markets

This position paper is the work of more than a year of research and discussion between Liqwith and Chaintip. The result? A proposal for a new ecosystem in the financial world. Our goal is to bring together new technologies and traditional financial parties in the Netherlands.

Dutch eBook about crypto financing for start-ups in the Netherlands

Free e-Book (in Dutch) about cryptofinancing as for start-ups in the Netherlands written by Herman Vissia, CEO ByeleX, The Next Innovation Company.

Podcast VissiaVisie May, 17th 2020

What problems are “crying out” for blockchain? What does the better world look like in which money flows are not, or at least much less, controlled by governments and banks? Can you genuinely get rich with bitcoin? This Dutch podcast addresses these questions and more.

Podcast VissiaVisie April, 17th 2020

This Dutch podcast is the first part of the new series of podcasts that connect technology and current events. Herman Vissia speaks with Hans van Willigenburg.

Interview with Herman Vissia on the BNR Podcast

Our first STO story (at the moment referred to as an IPCO, short for Initial Public Coin Offering) at BNR during the Cryptocast of Thursday 31th of may. We had the opportunity to promote this technique to our first customers and to tell more about ByeleX, The Next Innovation Company.

Get in touch

Want to get in touch? We’d love to hear from you. Here’s how you can reach us…

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Helium 12
4751 XB Oud Gastel

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+31 165 33 22 44

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info@liqwith.io