Securrency Launches Security Token Protocols CAT-20, CAT-721 to Ensure Compliance
US-based fintech firm Securrency launched its security token-related protocols CAT-20 and CAT-721, which are referred to as Compliance Aware Token (CAT) standards.
Securrency, a New York-based fintech firm, announced on Friday that it had introduced the Compliance Aware Token standards CAT-20 and CAT-721, claimed to be the first interoperable ledger-agnostic security token protocol in the world. Security tokens issued under the CAT protocols are compliant with the regulations throughout their entire life-cycle thanks to the regulatory technology provided by Securrency. The self-governing security tokens cannot be moved to or from a digital wallet that doesn’t meet the specific requirements. This is achieved with a token key-lock feature, for which Securrency had filed a patent application.
The tokens built with CAT-20 and CAT-721 protocols may be supported and transferred across any major blockchain network, such as Ethereum, Ripple, Stellar, EOS, and GoChain. The compliance during primary offerings is achieved thanks to the following features:
- Automated Know your Customer (KYC) and Know Your Business (KYB) procedures across more than 160 jurisdictions.
- Transaction verification procedures via Know your Wallet (KYW) service that scans wallets and related cryptocurrencies automatically.
- Source of funds (SoF) verification solutions carried out automatically.
- Confirmation and approval of an investor’s accreditation based on the jurisdiction.
Securrency CEO and co-founder Dan Doney said:
“We developed the CAT-20 and CAT-721 standards because security tokens should be truly liquid - they should not be limited to one ledger and they should be easy to trade, transfer and regulate.”
“This new protocol will enable speed, efficiency and transparency for issuers – from Wall Street to Main Street – while meeting compliance at a global scale,” he explained.
The two protocols are entirely compatible with Securrency’s proprietary Decentralized Investment Banking Services (DIBS), a full kit of security token issuance and management tools that can be implemented by investment banks, accessed by developers through APIs, and directly used by token issuers.
Securrency plans to make its CAT-20 and CAT-721 protocols available to other security token issuance platforms to promote the adoption of security tokens and support global liquidity.
Securrency COO John Hensel stated:
“Security tokens represent a pathway to the successful development of highly-liquid blockchain-enabled capital markets.”
“However, there have been major challenges that stand in the way of mass adoption, including ‘walled garden’ approaches and complicated technical deployment. We believe that the global interoperability of the CAT-20 and CAT-721 protocols, as well as Securrency’s simple and convenient token issuance and maintenance tools, will establish a common standard that can be used by all issuance platforms to support the growth of the security token economy,” he added.
In the meantime, Securrency partnered with California-based blockchain firm QuantmRE to help it build its real estate trading platform, which focuses on security tokens backed by property assets. The real estate product developed by QuantmRE will rely on a stablecoin called EQRE, which will be backed by property-related assets. Securrency will offer its new CAT-20 protocol to ensure QuantmRE’s token is maintaining compliance.
Security tokens are a type of blockchain-based tokens that represent a form of ownership of company shares, real estate or other types of real-world assets. By holding security tokens, investors own portions of specific real-world assets. Given that such tokens are related to the securities market, they must be compliant with the regulations. In light of this, Securrency’s multi-venue identity services and Rules Engine system makes sure that compliance is maintained on and off-chain, during secondary-market trading, and throughout the token’s lifecycle.