Security Tokens are Missing the Mark...
It all comes down to the governance. You must track ownership and you cannot go over the limits of private company shareholder counts or the company must file as a public company.
There are limits to how many shareholders are allowed in a private company before it must register as a public company. That then requires quarterly (10-Q) and annual (10-K) reporting to the S.E.C., and it means that you must always know who owns the company's equity and still keep them accredited-only in the United States.
That number in the U.S. is 2,000. That means anyone who is creating a security token cannot sell fractional ownership or allow those selling the tokens to sell to more than the limitations of private companies, and fractional ownership is off the table.
As I studied this space the last five years I figured out how to stay within the limits. I provide this capability to the members of AngelTrades, which is a private national network of accredited investors in the United States. Members can list opportunities, buy and sell those opportunities and we keep them all compliant and cover the governance utilizing the Special Purpose Token, which was invented by myself, John Gotts, along with the help of Hughes, Hubbard & Reed in Washington D.C., and my former SEC Commissioner attorney.
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