Securities tokenization startup, TokenSoft, announced in a press release on August 1 that it has updated its platform to include know-your-business (KYB) checks services.
The new updates, according to TokenSoft, is in line with requirements set forth by the U.S Financial Crimes Enforcement Network (FinCEN) in recent amendments to the Bank Secrecy Act.
TokenSoft completed a beta-testing of the new feature, with the official rollout now coming over a year after the new FinCEN rules came into force in May 2018.
What is KYB for Securities Tokenization?
KYB for securities tokenization is the process through which token issuers collect relevant information about investors. This data collection is a requirement, according to the Bank Secrecy Act and is similar to the process required to access the full features of some cryptocurrency exchanges.
TokenSoft CEO, Mason Borda also spoke about the new feature in the press release while highlighting steps they took to make sure the KYB process is not time-consuming.
Borda said that despite the average KYB processing time for a single entity being ten days, their new checks would employ automation to bring the "processing time down to a few hours.”
The KYB process will also benefit TokenSoft, its clients, and investors into security token offerings (STOs) by making institutional clients onboarding faster, as well as guaranteeing advanced cybersecurity.
Notably, the new process will also allow TokenSoft to bake in compliance on-chain, placing them in a better position to issue security tokens in line with industry and regulatory standards.
In other news regarding a securities tokenization startup, Stmarket.co reported yesterday that the Securitize platform is powering a token offering by Rise Wealth Technologies with a target raise of $120 million.
Securitize also issued tokens representing equity ownership in the popular newsletter business, Curzio Research.