Berlin, March 10, 2021 — The International Token Standardization Association e.V (ITSA) released a list of security tokens issued under German regulation. A majority of these tokens offer profit participation in the form of debt instruments (Genussschein). For now, the list contains 22 different tokens from Bitbond, Bloxxter, Exporo, Exacore, FND Group, L’Osteria, Palmtrip, PREOS and Vogemann Group. More tokens will be added as time passes. The integration of lists to Tokenbase follows ITSA’s efforts to increase market transparency among tokenized securities, which have been on the rise since the first debt tokens were issued by Bitbond in July 2019. The Tokenbase list on German security tokens combines the unique and fork-resilient identification data of the International Token Identification Number (ITIN) and in-depth classification according to the multidimensional ITC, providing a reliable data source for market participants.
Authors: Christian Viehof, Maximilian Bruckner
With the implementation of a list functionality, the first list of German security tokens has been published in the Tokenbase. The list contains 22 different security tokens of which 14 have been issued by Exporo, a leading platform in the area of real estate tokenization located in Hamburg. In the upcoming months, additional security tokens and new lists will be added to the Tokenbase in an effort to enhance market transparency within the token ecosystem. For now, the list is comprised of nine issuers: Bitbond, Bloxxter, Exporo, Exacore, FND Group, L’Osteria, Palmtrip, PREOS and Vogemann Group.
Tokenbase is a holistic database for the analysis of tokens that combines identification data of the ITIN and classification according to the ITC with market and blockchain data from external providers. Currently, Tokenbase holds data on over 4000 tokens with third-party data of several partners already integrated and API access in development. The list entries are linked to their specific Tokenbase entry and ITIN (a 9-digit alphanumeric technical identifier for DLT-based fungible and non-fungible tokens). This allows the connecting and matching of other media and data to the token, such as legal contracts or price data.
The link associated with the Label leads to the Tokenbase entry of the specific token (figure 2). The Green Ship Token, for example, was issued by the Vogemann Green Ship Token GmbH with the support of neoFIN GmbH, a Hamburg-based security token offering (STO) platform that could bookmark VGST as their first successful STO.
In figure 3, you can see the full classification of the VGST token as it is available in Tokenbase. The token is fully classified according to the six current dimensions of the ITC, which we now explain in more detail.
Economic Purpose (EEP): Provides the economic purpose of the token and the information on the reason for a token’s creation as well as its intended use and functionality. The Vogemann Green Ship Token (VGST) is listed as Other Investment Token (EEP23ZZ) due to its equity equivalent profit participation rights.
Industry Type (EIN): The dimension “Issuer Industry” forms part of the economic dimensions, and provides information on the industry in which the issuer of a token is active. The issuer of VGST is active in the field of Manufacturing, Trade and Logistics (EIN04).
Technological Setup (TTS): This dimension describes how a token is implemented and deployed. VGST is an Ethereum application layer token based on the ERC-20 standard (TTS42ET01).
Legal Claim (LLC): The dimension “Legal Claim” provides information on the rights that a Token provides its holder with. VGST does entitle its holder with a claim against a natural or legal counterparty and thus with relative rights towards a third party e.g. the right to receive a payment from the counterparty (LLC32). However, the token does not provide its holder with any absolute rights, except for the right to the token itself.
Issuer Type (LIT): The dimension “Issuer Type” provides information on the nature of the issuer of a token. VGST is issued by the Vogemann Groen Ship Token GmbH, which classifies as a Private Sector Legal Entity (LIT61PV).
Regulatory Framework (EU) (REU): The dimension “Regulatory Status EU” provides information on the potential classification of a token according to the European Commission’s proposal for a Regulation on Markets in Crypto Assets (MiCA, Regulation Proposal COM/2020/593). VGST falls into the Category “Crypto Asset out of Scope of MiCA” (REU52) that captures every Token that is falling explicitly out of scope according to Article 2 of EU Regulation Proposal COM/2020/593 final, or which appears not to be covered by MiCA otherwise.
The ITC Dimension Economic Purpose forms part of the Economic Dimensions Group and describes the reason for a Token’s creation from the issuer’s perspective. The dimension currently covers three major categories: Payment Tokens (EEP21), Utility Tokens (EEP22) and Investment Tokens (EEP23). All security tokens are a form of investment token. In version 1.0 of the ITC, the Investment Token subcategories (Equity Token, Entitlement Rights Token, Debt Token, Derivative Token, Fund Token, and Other Investment Token) have been aligned with the Classification of Financial instruments according to ISO Standard 10962 for improved transparency and interoperability.
Since January 1, 2020, crypto custody is recognized as a financial service under the German Banking Act. As for now, the scope of permission of crypto custodians currently consists of: “the custody, management, and safeguarding of crypto assets or private cryptographic keys used to hold, store or transfer crypto assets for others”[1]. The now presented draft law on the introduction of electronic securities, which are to be entered in electronic securities registers, introduces the maintenance of a crypto securities register as a new financial service under the German Banking Act. According to the eWpG, an electronic security that is entered in a crypto securities register is a crypto security. Electronic securities as well as crypto securities are securities within the meaning of the German Custody Act (Depotgesetz). Security tokens that were issued before the eWpG will come into force but are not automatically regarded as crypto securities. First, they must be entered in a crypto securities register in order to become electronic securities, though there is no obligation to do so[1].
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Christian Viehof is an Executive Director at the International Token Standardization Association (ITSA) e.V., working to create the world’s largest token database including a classification framework and unique token identifiers and locators. He completed his Bachelor in Economics at the University of Bonn, the Hong Kong University and the London School of Economics and Political Science with a focus on Behavioral Economics and Finance. Currently pursuing his Master of Finance at the Frankfurt School of Finance and Management, you can contact him via christian.viehof@itsa.global and connect with him on Linkedin, if you would like to further discuss ITSA e.V. or have any open questions.
Maximilian Bruckner is an Executive Director at the International Token Standardization Association (ITSA) e.V., working to create the world’s largest token database including a classification framework and unique token identifiers and locators. He has a strong international background with significant time spent in Spain, South Africa, and Canada. Currently pursuing studies at the Frankfurt School of Finance and Management, you can contact him via maximilian.bruckner@itsa.global and connect on LinkedIn if you would like to further discuss ITSA e.V. or have any other open questions.
[1] Bird & Bird — Germany: What are crypto custodians allowed to do under the draft eWpG?
