Investment Process: Compliance Overview

Real-World Assets (RWA) are not typical cryptocurrencies. Because they represent actual ownership in physical assets (like real estate, private credit, or equity), they are classified as Securities in the US and Financial Instruments in Europe.

This distinction is critical. It means that unlike buying a utility token, investment is protected by decades of financial laws designed to prevent fraud, ensure fair settlement, and guarantee legal ownership. This guide explains the specific regulations we adhere to and how they impact investor.

1. Investor Eligibility

Before investor can view sensitive deal details or invest, we are legally required to verify that the investment is suitable for investor. This "Gatekeeping" phase is governed by two main frameworks depending on investor's location.

In the United States: Regulation D (SEC)

Most private RWA offerings operate under Regulation D, which provides specific exemptions for private placements.

• Rule 506(b): Allows investor to "self-certify" their status, but strictly prohibits us from advertising deals to investor unless we have a "substantive pre-existing relationship."

• Rule 506(c): Allows us to show investor deals publicly, but requires us to take "Reasonable Steps" to verify investor's Accredited Investor status. This is why we may ask for a CPA letter, tax returns, or brokerage statements.

  • _See: SEC Rule 506 of Regulation D

In Europe: MiFID II & MiCA

• MiFID II (Markets in Financial Instruments Directive): If the token represents a financial security (e.g., equity), we must ensure the investment is "Appropriate" for investor based on investor's knowledge and experience.

• MiCA (Markets in Crypto-Assets): If investors are paying with stablecoins, we ensure those tokens are authorized E-Money Tokens (EMT) or Asset-Referenced Tokens (ART) to protect investor's purchasing power.

2. Anti-Money Laundering

To prevent the platform from being used for illicit finance, we adhere to the Bank Secrecy Act (BSA) and Global FATF Standards.

CIP (Customer Identification Program)

We are required to collect and verify investor's Name, Date of Business, Address, and Government ID before opening an account. This is not optional; it is a federal requirement under the USA PATRIOT Act.

The "Travel Rule" (Crypto Payments)

If investor fund the investment using cryptocurrency (e.g., USDC), we must comply with the FATF Travel Rule.

• The Rule: For transactions over a certain threshold (typically $3,000 or €1,000), the originating financial institution (the wallet provider) must transmit investor's identity data to the beneficiary institution (us).

• Impact: This ensures that crypto transfers are as traceable as wire transfers, preventing sanctioned entities from participating in our markets.

3. Asset Safety & Settlement

One of the biggest risks in private investing is "Counterparty Risk"—sending money and getting nothing in return. We mitigate this using strict custody rules.

SEC Rule 15c2-4 (The Escrow Rule)

When investor invest in a contingent offering (e.g., a deal that must raise $5M to succeed), we never touch investor's funds directly.

• Requirement: Investor's funds must be deposited into a separate Escrow Account at a qualified bank.

• Protection: If the deal fails to reach its target, the bank returns 100% of investor's money. The issuer cannot access these funds until the closing conditions are met.

Delivery vs. Payment (DvP)

We enforce a settlement standard known as DvP. This means the transfer of the asset (the token) and the transfer of the payment happen simultaneously. Investor effectively "swap" cash for the token in a single, atomic transaction, ensuring investors are never left without the asset investor paid for.

4. Transparency & Record Keeping

Blockchain is transparent, but the law requires us to provide specific, human-readable records of investor's activity.

Trade Confirmations (SEC Rule 10b-10)

Immediately after investor commits to an investment, the system generates a formal trade confirmation.

• What it contains: The exact date, time, price, number of tokens, and—crucially—any remuneration the platform received for the deal.

• Why: This ensures investor have an immutable receipt of the trade terms before the market moves.

Electronic Records (SEC Rule 17a-4)

All investor's signed agreements, chat logs with support, and transaction histories are stored in WORM Format (Write Once, Read Many).

• Impact: This technology prevents anyone (including us) from altering or deletinginvestor's records. In the event of a legal dispute, investor can be certain that investor's investment documents are original and tamper-proof.

Summary of Protections

Feature	Legal Basis	Benefit to Investor
Accreditation Check	Reg D 506(c)	Ensures investor meet the financial safety buffer required for private assets.
Escrow Account	SEC Rule 15c2-4	Guarantees the money is returned if the deal is cancelled.
Trade Receipt	SEC Rule 10b-10	Provides legal proof of the transaction details immediately.
Record Locking	SEC Rule 17a-4	Ensures the contracts cannot be secretly altered later.
Stablecoin Check	EU MiCA	Ensures the crypto payment method is solvent and regulated.