Luc Falempin is CEO of Tokeny and has been immersed in technology solutions ever since he founded his first business ventures in 2012. Being in the first generation to learn web technology at school, he graduated with a BA (Hons) from University of Montreal, achieved an Ebusiness MBA at Institut Léonard de Vinci and received a web analytics diploma from University of San Francisco. 2012 was a seminal year for Luc as he funded his first venture in Modizy, an AI and technology-driven social shopping platform, which he sold it later in 2015 to pivot to another technology platform in Izberg, a SaaS solution that is widely recognized as one of the most advanced e-commerce platforms for online marketplaces. In 2017, Luc sold his stake in Izberg to focus on Tokeny, a technology solution with the vision of disrupting traditional finance to bring more fairness, transparency, and inclusivity to capital markets.
Tokeny The Luxembourg based fintech is dedicated to providing an institutional grade, secure end-to-end platform, supporting the sale and management of tokens during and after an STO. Tokeny is able to bring to its clients the experience of being the first European platform delivering live projects, including $250m of Property, and €50m of Equities.
The Tokeny platform allows a company to focus on its business concept, marketing, and all the other aspects of an STO without needing to be concerned with any of the technical challenges.
Tokeny solutions handle high volumes of contributors simultaneously, while also managing bank-grade KYC & AML compliance, as well as a fully featured contributors’ portal and well tested smart contracts.
The international team behind Tokeny brings skills from the traditional securities world, as well as blockchain, and decades of experience in delivering mission critical global technology solutions.
Hey everybody, it's me, Adam Chapnick, with the Security Token Academy. I'm excited because I'm joined today by Luc Falempin. He's the CEO and founder of Tokeny.
Thanks so much for joining us.
Thank you very much for inviting me.
Of course. So, you guys are doing a lot of exciting stuff, but first, for everybody who's watching, what is Tokeny?
Tokeny, it's a tokenization platform. Basically, we create tokens for clients, so issuers. We can handle STOs, security token offerings. We involve investors, and we of course provide the full set of smart contracts. So, we are an end-to-end solution to issue, manage, trade, tokens.
Amazing. How did you guys, how did you personally get into this? How did that come about?
I've been an entrepreneur for almost a decade now. I involved in the eCommerce industry before, so I know software mostly. And, my previous company was doing online marketplaces. So, when I heard about de-centralized marketplaces I, 'Okay, something's wrong.' Something I didn't get. I had to invest in that, and I started to read a lot about it. I'd say I booked my first Bitcoin in 2011, something like that.
So, I already knew what was crypto.
Last year I exited my company, and Bytoken was my previous investor. We were like, 'Okay, talking about token, so talking about securities, I think we're talking about the same thing. So we should do something, a new venture.' And one year later, I'm there.
How about security tokens? When you started, did you envision that that would be something that you would be doing? Or did that evolve?
We started with the vision of security tokens.
I wanted to buy some stock options when I was student and it was impossible. Like so expensive, I have to open a bank account, I have just a few money and it was really hard to invest. So the trial was on Bitcoin at that time. The first vision of Tokeny was to give more access to this investment product to people, to rotate investors mostly. Of course the market was not there yet, so we started with standard issuance platform for ICOs. So we ran it as an ICO already on the platform and now we make this MVP evolve to handle security tokens as well. We can involve different kind of investors. It's all about compliance, about the capability. It's just an evolution of what we already do for four years.
Yeah, what jurisdiction do you domicile in? Where are you guys based?
It's interesting, because we are based in Luxembourg.
A very tiny village in Europe, between France, Germany, and Belgium.
But it's actually the second place in the world with money under management.
We have 4000 hedge funds in Luxembourg.
Oh my goodness.
Everybody knows each other.
So it's very interesting inside the center of Europe and Europe is moving in the right direction about security tokens. We try to be the leader in Europe. Of course Asia is moving very well, so we will open an office in Singapore very soon.
And of course the US is the biggest market.
But the slowest, it seems.
Not the slowest, but you have security rules that are very clear, but very strict.
So it takes time to understand them and to understand who are the players around, but it's possible. If you play with the rules, everything is possible.
Does what you do, is it dependent on any particular jurisdiction, or are you totally agnostic?
We already have clients in five continents, so we are a global company.
Actually, the issuers' jurisdiction is important, but the investors' jurisdictions are very important as well.
You cannot distribute securities where you want, as you want.
We help our clients to manage that part and to be sure that they distribute by following the rules.
Got it. So what's the life cycle of a client? If I'm a guy, and I say, 'I've heard about these security tokens. I hear they give me liquidity. They give me international access.' I call you up and I say, 'Help me out.' What do you do for me?
We receive a lot of demands every month, but we only select the best projects. You know we are a software editor, so we don't do any kind of marketing, we don't do the BPN, we don't do the white paper, we don't do all that stuff. We do the technology part.
And we do it as best as possible.
So we work with other partners to be sure the project is ready and well-defined when it arrives to us.
And then we enforce the compliance rules directing the solution, depending on the investor we want to involve, the countries of distribution, and so on. We forsee a set of parameters to ensure the compliance and the involving of investor in a proper way.
What's the most exciting part of the security token industry right now? It's gone from zero to 60 in a year.
Yes, it's very fast, that's why it's exciting. You can point very quickly to big players from the financial industry, but there's no big players in the security token industry. My background is in eCommerce, as I said just before, so in the eCommerce field you have big payment providers and big markets that do what they want with you. As a new startup, it's really hard to reach the right scale. In this industry, you can provide a lot of value to your customers really quickly because there are no major players in the market. We can work on concrete use cases and that's what is really exciting.
Are you seeing any verticals that are outstripping others, any kinds of businesses that seem to be using this first?
Yes, I think the investment funds are really interesting targets. Many people talk about real estate.
Sure, because it's not very liquid. That's so you have equity. Equity is depends. It's not clear if it will help small companies or medium companies, maybe listed companies, but I don't think so. I think real estate funds, for example, are a good example. Any kind of investment funds can be tokenized, to bring more liquidities to investors. Especially close-end funds. You don't want to invest your money, five, seven, ten years and be locked in your investments. You can by creating a secondary market, it can be very interesting for investors.
Are you working with any particular partners, whether it's in platforms or exchanges, that have started to become friendly?
Yes. We are talking with a lot of exchanges.
Most of them don't know exactly how they will under the permission tokens side and identities of investors, the in-chain, out-chain. It's been interesting to talk with all of the partners from day one, to be sure we can provide the right tokens to them. So it changes our big part, but also big law firms and global law firms because when you do security token offering you want to distribute in as many country as possible but it's really hard to find a law firms that can help you in all of these countries. So important partners and also broker dealers or any players that can bring investors to our clients.
Right. What do you think has been the most difficult part of deciding to get into such a new industry and weed-whacking with a machete through the jungle. What have you encountered as obstacles?
I think now people know about blockchain they know it's interesting. These scam crypto is a bit behind so it's nothing to be easier. But there's still a lot of incomprehension and we have to explain a lot of what we can do and what else is missing points. As far as the identity part is very important for example and it's good to talk about permission tokens and to transfer token with validator service but where is this validator service, for example. What is the role of the custodian? Because it's changing. We have to do a lot of education a lot of evangelism. It's good because we learn as much, as well.
What's on the horizon for your company, Tokeny in terms of the business plan, in terms of where you think everything is going.
For Tokeny, we try to involve three to four clients a month, as the maximum. We still do some utility tokens, very selected ones. But for the security tokens offering different… for many jurisdictions, I think in Europe it will come very fast. We have a lot of projects in Switzerland, and also in Europe. So the target is to learn STOs properly, not small projects, but real projects with real assets behind the token. If we find the right investment, for the investors, if it's tokenized it will be better but the value will not be the token itself, it will be the investment behind the token. So we're are trying to find the best project to launch properly.
Got it. If someone was hoping that they would be right for you, in terms of wondering if they could work with Tokeny. What would be the perfect profile for a prospect?
A well-defined project with the right team.
Does it have to be asset backed?
Not necessarily, but most of the time it is. It is depending, so much innovation we already have seen very crazy projects. Some of them are so ambitious, it's so exciting. That's why we have to filter, we have to be sure they have time to do it, the right associates to do it because it's not cheap to do an STO, it's complex. But it's to raise millions, so it's not the same craziness for ICOs who's an MVP you can raise on word of millions. But it's to raise big amounts of money, dozens of millions so it has to be well prepared; you cannot launch an STO in two weeks. It doesn't work.
Okay so, looking into your crystal ball, the Luc crystal ball. When will the security token industry become the 'norm?' When will everyone be doing everything tokenized, every fund will be tokenized so that the LPs can get out, my house is going to be tokenized so my neighbors can have a piece of it. When's that going to happen?
It's going to tokenizable, definitely. Because you have value everywhere, let's represent it online so we can use it and try it and do many things with this value. But it's a bit, chicken-egg problem. We need to create the first good tokens, so it will be tradable, you will be able to use it to automate things. The target is to have mobile banking applications, now it's time to add some investments. So I think very soon we will be able to invest, via tokens in good investment products.
Yeah, it's exciting. I'm sure Tokeny will be right in the middle of all of that, so we wish you all the luck in the world, and thanks for joining us today.
Thank you, thank you.
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