EthCC 2: Luc Falempin

okay thank you and I have to say I'm very happy to be to be out today because I'm used to talk with with people from the traditional finance so for one to the other side and today we're going to talk about unchain identities and no it could help he mastered option of security tokens may be a very quick word about about me first so my name is Rick folbaum I'm the CEO of token e.com token is a is a compliant platform for tokenization so we represent assets mostly financial assets on the algebric chain for for clients or customers we started in 2017 so I'm quite quite an adventure so far [Music] okay so my my personal relation with blockchain started in in 2011 and at the time I was still still a student and I want you to invest my savings and 1000 euros at the time so as you usually do you go to the bank and and you ask or you can invest your money the answer was stock markets obviously so I want you to buy to Google shares and so I had to obtain a new bank account to pay some broker brokerage fees and at the end it was more than 100 or so more than ten percent of my savings just to acquire the shells and of course as we are not even mind it's a it's an indirect ownership when you buy shares on the stock market so not really interesting and I searched on the internet and I found digital assets so of course at that time in 2011 the first digital asset was was Bitcoin and and from it was exactly what I was looking for I could invest exactly the amount I wanted to invest I was inject one whole of my investments it was transparent it was easy without too many intermediaries so so I started to get involved with with blockchain and later one with with ethereum so public markets public markets are interesting but it works already and I don't think blockchain will disrupt two big markets before a very long time before a decade maybe and you already have got a lot of big investment it's a big machine it's archaic okay but it works so we will not disrupt public markets tomorrow and also I think we have to to face reality a blockchain where you have a network of nodes and they need to reach consensus to validate a transaction it can be it cannot be faster than a centralized database so many things to do with public markets but it's not it's not where the description will be in the next years however private markets almost no infrastructure today the trust is broken is bring by book by euros and notaries and so it's very complex to acquire shares in a company in a private company I know real estate phones or to invest in commodities trees for example and so these markets I've almost no infrastructure and blockchain could be one of this infrastructure so with the blockchain every every stakeholder can share the same single source of true so it's a turnkey infrastructure at very low fees and the trust is in directly built in this infrastructure so it can be used for for smaller markets like private markets of course for public markets when you do your IPO every stakeholder is already identified via the stock exchange so every broker dealers every issue and so on if we change the infrastructure and we use a distance one everybody needs to be identified properly and a wallet is not a good way to identify someone we need a system to trundle on chain identities and if we do so it opened a lot of new markets because we'll have every components to to provide this infrastructure and to apply the compliance force under the centralized system monitors right infrastructure Security's rules are super complex you have rules for the offering you have rules for investors and so to apply the right rules to the right person we need to identify voice role and the blockchain so let's assume we have we have this distant solid system a blockchain immutable scalable secure so the first week sure is decentralized but securities of ring is centralized the issuer has some obligation he has to be in control with his investors at any time to be sure and validate their identities I did some KML processes and so on it's a responsible is liable what is happening which is with the Securities so he needs to keep control on their side investors have rights it's a book shares for example in the companies you can voting rights rights to get access to a part of the revenues and so on so it's a properly identified you can see can claim the rights otherwise it's very complicated and also finally regulators regulators needs control they need to know who is responsible who is doing what on the blockchain so all of this show demonstrate that unchain identities are extremely important to make the the world system work so what is exactly and unsane identity an unchanged identity can be a smart contract talking if for example we use the ERC 725 standard and it is not contract we have different type data claims so for example as the KYC statues and address of wallet a name or whatever so each issue of securities can decide which claim needs to apply compliance so we have several use case and very interesting thanks to 2010 identities so the first one is compliant issuance how do you issue a security token in full compliance e with sunshine identities so what we do at token is that we onboard investors with the Angela information name address etc say upload documents ID cards full of whales as that kind of informations and at the end of the subscription process we deploy your smart contracts representing the identity on the blockchain and in this mud contract we already have the claims and these claims are signed on the blockchain by trusted third party provider authorized by the issue so the issuer can define we trust and the ecosystem some kyc providers and sovereign entities and etc so on the blockchain we don't have the data we have the signature that someone is your trust validated as the data so that what we do for insurance and of course it generates the initial list of investors and with this initial list of investors we can control every transfer so each time there is a transfer we apply we applies the same the same method we will identify the receiver so at any time the issuer knows who owns what whoa who is investors another use case is digital signature it's a very interesting one because if your identity is insane you can sign with your identity and in many jurisdictions receiving a token a secure area security token doesn't mean you get the ownership of the securities in Eastern style for example you have to approve that you want the ownership so if you can sign on chain and you can prove that you are your great receive this ownership and also direct control and delegation so with digital I said I'm in control of my own assets that I can still walk with my asset manager I can give him access to two part two part or the totality of of my assets so you can manage them directly but I am in control if of what I'm doing at any time and one of the other use case is compliance automation for taxes for example we can automate the taxes payment you a key we don't change identities for example if we know that you are French resident we can directly take the capital gain when you do a transfer so what do we need to make security tokens a bit more adopted and first we need we need wallets it's actually what we see on the market is blockchain is not yet accessible because of wallets of course we have met an ask I'm pretty sure for everybody here it's simple to use for my mom it's not so we need better wallets and we need more sexual wallets where where people can delegate some some accesses as it can do a multisig excetera but very in a very friendly way each time we talk with a big financial institution they talk about custodian because they don't know we can mint and beyond tokens easily with security tokens so some works is needed on on the wallets identities of course so we use we use once turned out that a token e and that also could could emerge and also and it's it's probably the more important one assets we need good digital assets for the moment we are we are very interesting project coming but the life assets are pretty poor many many people don't come from the financial industry they don't know to structure security so we already need to work on this and this link between financial institutions and blockchain it's what we try to do every day and but but of course you see where we'll be still I still long and finally liquidity so liquidity is one of the ultimate goals what we do at token is not providing liquidity it's providing transfer ability and this transfer ability in a compliant way will generate liquidity but we need this intermediary step talking about liquidity for security tokens for the moment he is not the right the right topic we need to be sure that we can transfer tokens in a compliant way in an injury addiction so can we talk about bright future for security tokens I think so of course it's moving very fast and if we take the example of friends see the day before Christmas last year the new regulation was was accepted and now you can use the blockchain as a primary registry for your shoulders which is a great advancement and in Luxembourg we have a similar new regulation talking his bed in some work today of Valentine's Day the regulation was was voted and now you can transfer securities on the decentralized network on a blockchain so there's both new regulations prove that blockchain is becoming a legitimate infrastructure for securities which is a great advancement so in the traditional finance the regulator's regulate stock exchanges but if we think that the blockchain is becoming the new infrastructure it has to be new regulation for new systems but in in most countries there is no problem to use a blockchain as infrastructure it's resilient and so on so it's very very interesting but of course you need to apply the securities laws and the copyright laws and that's what we do attacking me pretty sure that's what you try to do every day as well so we are very happy to to contribute thank you [Applause] any question maybe hi yes I've got a similar question I asked earlier to polymath and that is what are you or your company doing in terms of educating regulators with what you're doing and making them comfortable with blockchain technology and SEO securities etc just speaking from from my experience directly with financial regulators there some of them are quite uneducated some are more educated than others and they're not even educating themselves in some cases so so yes so I are you doing pushing any efforts what were you doing in that respect yes well we try to be as active as possible with regulators we met a few of them already when we we met the IMF and as my in Paris we met GCS SF of course in Luxembourg and we try to work with the Minister of Finance in example as well to improve the ecosystem we even went in Thailand to meet the regulator and the idea is to create a lot of content to educate the market and when we met this regulators directly of course it's very hard to get feedback and but we explained our core system and in this system of emission tokens is that we can attract at any time warns what and that will respect GDP are and everything and when we explain this system of Commission tokens alike okay so the compliance problem is kind of fixed yes it's possible because for at first the things that because it's on the blockchain and we use it around public I think everything will be P pick but it's not what we do we control every step and we apply financial work force on on everything to be sure that compliance is is always respected as much as possible so it's mostly education with regulators said teachers what they want and we teach them what we can do thank you thank you [Applause]