TokenSoft, a platform for issuing digital securities using blockchain technology, says the ERC-1404 token standard is seeing broad adoption for security token issuance.
James Poole, co-founder and CTO of TokenSoft, says that creating a standard for security token issuers made sense to developers:
“our customers, and their counsel was incredibly important to our tech team. We worked with issuers, exchanges, and their legal counsel to make sure ERC-1404 met their regulatory needs.”
Importantly, the ERC-1404 standard prevents the “flow back” of tokens originally sold to investors under Regulation S into the U.S. when offering security tokens internationally.
In a release, TokenSoft listed the following reasons why ERC-1404 is gaining industry traction:
- ERC-1404 is the only security token standard to be listed in multiple SEC filings on EDGAR as their token standard for issuance.
- INX, a TokenSoft customer, is planning the first tokenized IPO in the U.S. to raise up to $130 million using an ERC-1404 compliant token.
- TokenSoft customers use ERC-1404 to implement compliance requirements relating to The Investment Company Act of 1940 and FINRA Rule 3220 (Gifts Rule).
- ERC-1404 may implement the compliance requirements involved in the transfer of equities, debt and derivatives.