Requirements

CompToken assist its blockchain enterprise clients throughout the process to ensure an efficient and smooth completion of these requirements.

AML/KYC

Our CCF ensure the highest international levels of Anti- Money laundering and Know Your Customer regulatory compliance.

1. Issuer requirements

Enterprise customers wishing to launch a token on the CompToken platform will be required to adhere to the following KYC/AML parameters:

  • Each shareholder (Ultimate Beneficiary Owner) must submit to and successfully pass a KYC/AML check

This process is largely manual and takes some time to complete, as it requires notarization of personal identification documents, proof of address documents, source of funds verification and criminal background checks.

2. Investor requirements

  • Any investor wishing to purchase a token on the CompToken platform will be required to complete a Verification Section. This includes personal identification and proof of address upload, bank information and credit card information (if applicable)
    • CompToken performs certain internal, as well as external electronic verifications of this information
    • This means that no anonymous token purchases are allowed on CompToken
  • Investors wishing to purchase investment instruments listed on the DCSX and linked to CompToken tokens must go through the standard DCSX broker process (which also includes KYC/AML checks administered by the broker)

3. KYC/AML checks will be repeated on a continuous basis on all Issuers and Investors on the CompToken platform.

  • Failure to pass subsequent KYC/AML checks will lead to removal from the platform (cure periods will be provided in applicable cases), which will not remove ownership of the applicable security/token but will economic value participation and preclude trading on the DCSX.
  • CompToken KYC/AML checks are global in nature and include integration with leading providers of digital financial crime prevention services.

Token Design

Tokens are designed to include features that comply with certain important regulatory and investor protection requirements, including:

  1. All tokens must be (A) asset-backed or (B) issued by an enterprise with existing technology and/or operations.
    • Asset-backed: the token represents a fractional interest in either a physical (mineral, lumber, livestock, etc.) or financial asset (revenue rights contract, supply contract, etc.)
    • Existing technology and/or Operations
    • The blockchain enterprise issuing the Token must either have the key technology underlying their business already built or have already initiated commercial operation (or both).
  2. All Tokens launched on the CompToken platform must have an “Economic Value” Component such as dividends, revenue rights, profits, interest, etc.
    • The economic value component can be a dividend, revenue rights, interest, etc.
    • Earnings are paid out exclusively to registered investors (meaning: an investor who purchases a Token on a secondary market and fails to register as an owner on the CompToken platform will not be eligible to receive earnings payout)

Funding Rules.

Blockchain Token Issuers will be required to comply with certain additional investor protection features. All enterprise customers wishing to launch a token on CompToken must submit a business plan that includes the following:

  • Financial Projections (and actuals if existing enterprise; audited preferred)
  • A Milestones projection schedule which must be consistent w Prospectus to be submitted to the DCSX. Follow-on rounds will be subject to analysis for consistency of meeting previous milestones
  • A Use of Funds document must be submitted which details how the funds raised by the Token launch will be allocated in the different areas and phases of the business
  • Clarity on the allocation of ALL tokens granted to all internal parties (including Founders, employees, advisors, partners). This includes disclosure of the vesting parameters including: volume of allocations per individual, role of the individual in the enterprise and vesting schedule of the allocated tokens.

Jurisdiction

One of the most important aspects of the CCF is that it is based on adherence to existing rules and regulations in Curaçao. The CCF leverages technology and business process discipline to achieve compliance under existing stipulations within the jurisdiction.

Registration requirements for the jurisdiction of Curaçao include:

  • The entity issuing the Token must be located in Curaçao
    • Generally, this means the establishment of a subsidiary
    • The proceeds from the token issuance are then transferred to the parent company (depending on the chosen design structure)
  • Obtain all relevant local registration permits
    • Including incorporation, business license, bank accts, etc.
  • Must engage an external auditor (local office of a Global 6 firm)
    • Includes certification of starting balance for new subsidiary, as well as ongoing external review of financial reporting
  • Must engage a recognized international tax attorney
    • Tax rulings must be obtained prior to token issuance
  • Must engage a top 3 local law firm

Listing on Dutch Caribbean Stock Exchange (DCSX)

Each token launched on CompToken is deemed a security and simultaneously will be listed on the DCSX. The DCSX has a listing process that includes the following:

  • Engagement of an approved Listing Advisor
  • Declarations
    • Director’s Undertaking, Issuer’s Undertaking, Listing Advisor declaration
  • Documentation
    • Prospectus signed off by the Listing Advisor
    • Audited Financial Statements covering previous 2yrs
    • Alternatively, certified beginning balance
  • Continuing Obligations
    • Report any material corporate action
    • Annual financial reporting
    • Report on market developments that affect the listed instrument
    • Comply with DCSX rules