Asset Tokenization: Full-Cycle STO Development

You're tokenizing real estate or fund shares. Legal classification as a security isn't a whim but a regulator requirement if the token passes the Howey test. Ignoring this risks fines and listing blocks. We develop security tokens (STO) with full regulatory compliance: from tokenization to ATS listing. Over 5 years, we've completed more than 12 projects, including real estate tokenization, private fund shares, and corporate bonds. Contact us for a project assessment — we'll prepare a legal and technical scheme within 2 weeks.

How to Ensure Compliance at Every Security Token Transfer?

The key difference between an STO and a regular token is built-in compliance. On every transfer, the smart contract checks that the recipient is verified, their jurisdiction is allowed, and the balance doesn't exceed limits. This is implemented via the ERC-3643 (T-REX) standard, which we use as a base. Compared to ERC-20, ERC-3643 reduces compliance error risks by 80% thanks to built-in identity checks.

Regulatory Regimes — Asset Tokenization Development

USA: Regulation D, S, A+

• Reg D 506(b) — sale only to accredited investors (net worth > $1M or annual income > $200K), no general solicitation, up to 35 non-accredited. Requires Form D. Lock-up period: 12 months before resale (Rule 144).
• Reg D 506(c) — allows general solicitation, but only accredited investors, mandatory verification of status.
• Reg S — sales outside the US. Often combined with Reg D.
• Reg A+ — mini-IPO up to $75M, open to non-accredited investors, requires audited reporting.

EU: MiCA and Prospectus Regulation

MiCA classifies security tokens as Asset-Referenced Tokens or falls under MiFID II. Requires an issuance prospectus (exemptions for amounts under €8M) and a licensed issuer. Liechtenstein Blockchain Act (TVTG) — most progressive legislation: direct recognition of tokens.

Alternative Jurisdictions

Cayman Islands, BVI — SPV for non-US, non-EU issuances. ADGM (Abu Dhabi) and VARA (Dubai) — regulatory sandbox for STOs with real licenses.

Why ERC-3643 Became the Standard for Regulated Tokens?

ERC-3643 (Token for Regulated Exchanges) is an open-source standard developed by Tokeny with support from EY. It consists of five on-chain components:

1. Identity Registry — registry of verified investors (wallet → ONCHAINID).
2. Identity Registry Storage — separate storage for upgradability.
3. Claim Topics Registry — which claims are required (KYC_APPROVED, ACCREDITED, JURISDICTION_ALLOWED).
4. Trusted Issuers Registry — who can issue claims (KYC provider, broker, issuer).
5. ERC-3643 Token — the token itself, checks Identity Registry on each transfer.

// Simplified transfer logic in ERC-3643
function transfer(address _to, uint256 _amount) public override returns (bool) {
    require(
        _tokenIdentityRegistry.isVerified(_to),
        "Transfer to unverified identity"
    );
    require(
        !_frozenTokens[msg.sender] && !_frozenTokens[_to],
        "Wallet frozen"
    );
    // Check via Compliance contract (limits, jurisdictions, etc.)
    require(
        _tokenCompliance.canTransfer(msg.sender, _to, _amount),
        "Compliance check failed"
    );
    return super.transfer(_to, _amount);
}

ONCHAINID (ERC-734/735)

Each verified investor receives an ONCHAINID — a smart contract storing keys and claims. Claims are signed assertions from trusted issuers, allowing identity verification without revealing personal data.

// Claim structure (ERC-735)
struct Claim {
    uint256 topic; // claim type (KYC = 1, ACCREDITED = 2...)
    uint256 scheme; // signature scheme
    address issuer; // who issued
    bytes signature; // issuer's signature
    bytes data; // data (document hash)
    string uri; // link to off-chain document
}

KYC/AML Integration

Typical flow:

1. Investor completes KYC through a provider (Sumsub, Veriff, Fractal).
2. Provider deploys an ONCHAINID for the investor (or uses an existing one).
3. Provider as Trusted Issuer adds a KYC_APPROVED claim to the ONCHAINID.
4. Issuer checks the claim in Identity Registry — investor is admitted to the token.
5. On each transfer, the contract checks both addresses.

AML screening — continuous process. Chainalysis/Elliptic integrated for monitoring. On high risk score, wallet can be frozen via freezeAddress().

Compliance Contract: Custom Logic

A separate Compliance contract contains business rules:

contract STOCompliance {
    uint256 public maxInvestors = 2000; // Reg D limit
    uint256 public maxBalancePerHolder; // anti-concentration
    mapping(string => bool) public allowedCountries; // ISO 3166-1

    function canTransfer(address from, address to, uint256 amount) external view returns (bool) {
        // 1. Check recipient's jurisdiction
        string memory country = identityRegistry.getCountry(to);
        if (!allowedCountries[country]) return false;

        // 2. Maximum number of holders
        if (token.balanceOf(to) == 0 && token.holderCount() >= maxInvestors) return false;

        // 3. Concentration limit
        if (token.balanceOf(to) + amount > maxBalancePerHolder) return false;

        return true;
    }
}

Token Lifecycle

Secondary Market

For Reg D tokens, secondary market opens after 12 months (Rule 144). Platforms: tZERO, INX, MERJ Exchange — ATS with licenses. On-chain secondary market: permissioned orderbook or AMM. Uniswap v4 hooks allow adding KYC check in beforeSwap:

function beforeSwap(address sender, PoolKey calldata key, IPoolManager.SwapParams calldata params, bytes calldata) external override returns (bytes4, BeforeSwapDelta, uint24) {
    require(identityRegistry.isVerified(sender), "KYC required for trading");
    return (this.beforeSwap.selector, toBeforeSwapDelta(0, 0), 0);
}

What's Included in STO Development

• Legal analysis and jurisdiction selection (USA, EU, ADGM).
• Smart contract development based on ERC-3643 with custom Compliance.
• Integration of KYC/AML providers and ONCHAINID deployment.
• Code audit and formal verification (Mythril, Echidna, Slither).
• Cap table dashboard creation (on-chain + off-chain synchronization).
• Support for listing on ATS or permissioned DEX.
• Technical documentation and team training.

Development timelines: 3 to 6 months depending on complexity. Cost is calculated individually — write to us, we'll assess your project for free. Our engineers have experience auditing with leading firms and over 12 successful STO projects.