Alternative Tokens Are Here, But… What Are They Really!?
LATOKEN has launched Alternative Tokens trading. We understand this is not a common term, and therefore it’s best to make sure we’re all on the same page from minute one. Let’s get started with some basic definitions!
First things first. Let’s begin with what we know and then move into “unknown territory”. So far, there are three types of ICO tokens we all know. Bear in mind that the names of the following token categories might vary in different jurisdictions. After all, it depends on the regulator that’s been taken as a reference.
Below you can find the names used by two of the most influential authorities on the issue: the US Securities and Exchange Commission (SEC) and the Swiss Financial Market Supervisory Authority (FINMA).
Utility token (SEC & FINMA)
There’s not a unified definition of any of these token categories. So don’t be scared if you find a different one on another blog or website. Just pay attention to the essence of it: utility tokens give holders access to the goods or services that their respective projects will eventually launch in the future.
If you are a LATOKEN user, there’s a high chance this category is well-known to you. A vast majority of our listings are indeed utility tokens.
Let’s take an example: Timicoin. Over the last few weeks, we’ve listed Timicoin on LATOKEN. This utility token belongs to TimiHealth — the ‘tokenized healthcare ecosystem,’ rewarding patients with tokens for sharing their health information. Timicoin packages up and sells that information to clinical researchers and health insurance companies — giving each patient full control over their data. Timicoin is the currency that users rely on to operate on this healthcare data platform.
Security token (SEC) / Asset token (FINMA)
Again, there’s no international consensus on what aspects should be considered to classify a token as a “security token”. However, the name is self-evident… isn’t it? A security token tends to present features similar to traditional securities.
“If investors are buying tokens with the expectation that they will appreciate in value based on the efforts of others, that matches the traditional legal definition of a ‘security’,” said the Former CFTC Chairman Gary Gensler during a keynote speech at the Blockchain Economic Forum in San Francisco.
To summarize, we could say that security tokens are those purchased with the expectation that their value will grow overtime. In terms of their economic function, security tokens are analogous to equities, bonds or derivative instruments.
Cryptocurrency (SEC) / Payment token (FINMA)
These tokens are not related or linked to the development of an specific project. They are designed to allow holders purchase, sell or conduct financial transactions. Their functionality is similar to fiat currencies, such as the US dollar or the euro; but, of course, without the backing of a centralized government institution.
Great! Now that we’ve caught up with familiar concepts, it’s time we move into the unknown: Alternative Tokens — our new category of tokens on LATOKEN.
Sure. Let’s start with the definition our legal team has prepared for you:
“An Alternative Token is an entry in a blockchain ledger representing an asset or a combination of assets, or linked to values of assets, or certain rights as described in more detail on the Alternative Token’s webpage on the platform.”
LATOKEN is working to become a one-stop destination for crypto exchange and asset tokenization. Following that goal, we’re not limiting ourselves to just crypto pairs or utility tokens. We want to offer our users all kinds of tradable instruments through tokenization.
For this reason, we’ve created the Alternative Token category. In here, we’re listing tokens with features similar to security tokens (SEC) / asset tokens (FINMA). Nonetheless, Alternative Tokens are not limited to features of the named categories. We think of Alternative Tokens as a wider concept, compliant in multiple jurisdictions.
As we said, the launch of Alternative Tokens on our platform is getting closer. You can be the first to take advantage of this unique trading opportunity: just access your account settings and apply to become a Tier 3 Qualified Investor.
By adding Alternative Tokens to the platform, LATOKEN is once again showing full commitment to its mission to help develop a sustainable tokenized ecosystem. THIS is only the beginning.
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