Security token

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What is

Security token


A security token is a form of cryptocurrency. It represents fractions of assets that have real value such as equity, a company, real estate, etc.

In essence, security tokens owners have a stake in an asset. Owners receive a share from the profits of the asset; like owning stock from the company. Securities tokens live on existing blockchains such as Ethereum for example and don't have a native blockchain, unlike traditional cryptocurrencies. One well-known security token is Blockchain Capital (BCap).

Security token
A security token is a form of cryptocurrency that represents fractions of assets that have real value such as equity, a company or real estate.

As an investment asset, Security tokens are digital assets that represent ownership or other rights to transfer value from an asset or asset class to a token. In summary, security tokens are the digital form of traditional investments such as stocks, bonds, or other securitized assets.

For example, companies looking to raise funds for expansion projects can decide to issue separate ownership of their company through digital tokens instead of issuing shares. This token can then be offered to investors on exchanges that allow digital security tokens.

Discover more about blockchain crypto and compliance with our Glossary.

About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped over 200 customers in 40 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.

Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, Tezos, and Tron with TRC10 and TRC20 tokens. The software can de-anonymize the Blockchain data and connect with sanction lists to provide risk scoring on digital assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.