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What does a tokenization platform do?

The roles of a tokenization platform vary and go beyond being just a technical solution.

Due to all the important factors that go into launching a security token offering there are many companies referred to as tokenization platforms that are working towards easing the process of launching and managing a security token. Tokenization platforms can help bring together all of the aspects of an offering into one place.

During the actual issuance of the token there are compliance platforms that can ease the process of onboarding investors, streamlining the KYC and AML processes and providing traceability and reporting information to stay in compliance with all necessary regulations while best serving the investors. Some others will act as transactional platforms to ease the process of obtaining investors payments and also managing the actual token allocation.

After the security token has been issued and allocated to the investors, companies will have to handle the lifecycle management of the token. During this phase compliance platforms can provide for investor portals, allowing investors access to the information regarding their token and the company’s performance. Compliance platforms also provide for ongoing KYC/AML compliance as well as easing traceability and reporting processes and validating whether or not tokens can be traded and to whom. Transactional platforms provide key services such as managing the actual token transfers and managing revenue distributions such as dividend payments to investors.

These platforms will use blockchain technologies differently. Some will have all of the compliance logics off-chain and create a lot of dependencies to their service. Others will use blockchain standards to ensure interoperability and to provide security and flexibility to the issuer.