Comprehensive deck overviewing asset tokenization, securities regulation, blockchain, and future opportunities with digital securities. Created by Kadeem Clarke, founder of Clarke Global and former blockchain VC investor

1. Digital Securities Overview
11
Prepared by Kadeem Clarke, Founder

2. Agenda
22
I. Blockchain Overview
II. Digital Assets Overview
III. Introduction
IV. Market Opportunity
V. Industry Outlook
VI. Regulatory Overview
VII. Current Solutions
Overview: Explore the investment
opportunity in the newest wave of
blockchain and finance, digital
securities

3. Blockchain Overview
3

4. Blockchain Came in Two Phases
Blockchain 1.0:
Blockchain was first introduced in
2009 with its first application, Bitcoin.
In its simplest form, Blockchain is a
decentralized digital database, in
which untrusted parties can share
digital history and reach consensus
without a middleman.
Benefits
decentralization, security
transparency, immutability
programmability, self-execution
audibility, efficiency
Blockchain 2.0:
Introduced by Ethereum with smart
contracts, the utilization of blockchain has
grown beyond cryptocurrencies, enabling
interorganizational use cases. This enables
for exchange of value in a truly
peer-to-peer fashion, without the
involvement of middlemen, and the
potential for a programmable economy.
4
Benefits

5. Blockchain Will Save Money and Time 5
The core strengths of blockchain...
...bring the promise of reduced transaction costs and streamlined processes to the industry
Shared ledger Immutability Security
5

6. Blockchain Can Streamline Many Processes 6
Top 5cases for blockchain commercial adoption:
Digital identity
management
Cross-border
payments
Clearing and
settlement
Letter of credit
process
Syndication
of loans

7. Digital Assets Overview
7

8. 3
2
1
Not Every Token is Created Equally 88
to some extent similar to
securities
Security Token (SEC) /
Asset Token (FINMA)
gives its holders access to services
Utility Token (SEC) /
Utility Token (FINMA)
Cryptocurrency (SEC) /
Payment Token (FINMA)
often considered as a mean of payment

9. Digital Securities Combine Liquidity with
Lower Costs
9
Public securitiesTokens
Private securities
Liquidity
Cost effectiveness
Low High
High
Low
More liquidity

10. DSOs Bring Cost Effectiveness to Fundraising 10
legal 130,000 150,000 -15%
accounting 40,000 40,000 0%
legal fillings 75,000 75,000 0%
travel/roadshows 150,000 125,000 17%
automation/platform 50,000 N/A
senior management time 440,000 250,000 43%
regulatory compliance 200,000 50,000 75%
tax compliance 150,000 100,000 33%
ownership transfers 250,000 100%
listing fees 10,000 N/A
technology updates 50,000 N/A
admin 100,000 50,000 50%
rule 144 opinions (costs to investors based on 10 trades/yr.) 37,500 100%
1,572,500 950,000 40%
Cost saving analysis:
Traditional private
placement
VS
Digital securities
Ex. $50MM Capital (P.E.) Traditional Digital % Difference
5 years ($USD) 5 years ($USD)
OfferingOngoing

11. Digital Securities
Introduction
11

12. Any Asset with Ownership Can Be Digitized 12
A [digital security] represents traditional, private
security interest...Essentially, you’re taking
something that today you have on paper and
you’re putting an electronic wrapper around it.
—— Josh Stein, CEO of Harbor

13. DSO Incorporate the Benefits of ICOs and IPOs 1313
ICO DSO IPO
Regulatory oversight None Comprehensive Comprehensive
Track record & Credibility Weak None Strong
Utility Adoption Dividends Dividends
Duration of offerings Short Moderate Lengthy
Access to Trading Open to all Open to all Geographic
Limitation
Preparation Cost Low Moderate High
VS VS

14. Digital Securities Intersect Blockchain Tech
and Regulation
14
Blockchain Technology
Digital Securities improve
traditional financial products
by making ownership
programmable to streamline
global private investment
Digital Securites
Digital Securities are
considered the intersection of
digital assets and traditional
financial products with
government regulation
Government Regulation
Digital Securities are subject to
federal securities regulations,
including the Securities Act of
1933 (most importantly Reg D,
Reg A+, Reg S)
+ =

15. Digital Security
Market Opportunity
15

16. Multiple Asset Classes Can Be Digitized 1616
Real Estate
Startups and
Small Businesses
Mature BusinessesFine Art Venture Fund
Private Equity

17. Digital Securities Come in Four Structures 17
Tokenized VC Funds
provides token holders with a claim to a share of a fund
Benefits:
- Profits can be shared through token buyback
- Liquidity opportunities sooner (12 months vs 7 years)
- Capital allocation flexibility, smaller capital commitments
1
Asset-Backed Tokens
an economic right to a real-world asset, e.g commodities
Benefits:
- Can be used for fungible or non-fungible assets
- Ability to subdivide larger assets into smaller units and to
create unique and diversified products
2
Share-Like Tokens
ownership stake, LP shares, voting rights, or profit shares
Benefits:
- Fractionalization of ownership and increased liquidity
- Automated compliance
- After-hours operations
3
Crypto-Bonds
constitutes a fixed claim on future streams of income
Benefits:
- Elimination of middlemen and registries
- Reduction in settlement time and decrease in
operational risks
4

18. Digital Securities Address the Issues of Four
Large Markets
1818
Asset-Backed Tokens
CRE is a popular use case for security tokens
$54 trillion
size of global commericial real estate market
(Source: Fortune)
Tokenized VC Funds
shorter holding periods will attracts more LPs
$5.2 trillion
amount invested in VC firms
(Source: McKinsey & Company)
Share-Like Tokens
Given easier exit opportunities, VCs will invest more
$1.8 trillion
cash not being used by VCs
(Source: McKinsey & Company)
Crypto-Bonds
local governments are exploring the benefits of STs
$3.8 trillion
size of municipal bond market
(Source: Bloomberg)

19. Digital Securities:
Industry Outlook
19

20. Digital Securities Have 8 Major Benefits 20
Rapid settlement Reduction in direct costs
Fractional ownership Automated compliance
24/7 markets Flexibility of smart contracts
Increased liquidity & market depth Asset interoperability

21. Digital Securities Face Common Issues of New
Technology
2121
Regulation
Traditional asset digitization regulations
will take years to develop.
Governance
Solutions needed to enable governance
of widely held tokenized assets.
Deal Execution
Middleman’s responsibilities shift onto
the buyer or seller in the transaction.
Thinly Traded Tokens
If a token is thinly traded it is still
relatively illiquid.

22. The Digital Security Market Has Multiple
Infastructure Layers
22
Issuance Platforms Hybrid Solutions Exchanges Liquidity Layers
Existing Tokenized
Securities

23. Digital Securities:
Regulatory Overview
23

24. U.S. Securities Regulation Guide the Market 2424
Regulation D
most commonly used exemption
Regulation A+
best for unaccredited investor base
Regulation S
raise money from non-US investors
Section 5 of the Securities Act of 1933
all offers and sales of securities must be registered with the SEC or qualify for some
exemption from the registration requirements.
Exemptions:
These exemptions allow issuers to avoid the costly and lengthy process of registering with the SEC
Regulation CF
allows crowdfunding of businesses

25. Regulation D 2525
Rule 506(b) Rule 506(c) Rule 504
Offering limit within a year None None $5 million
General solicitation No Yes Limited circumstances
Issuer requirements None
“Bad actor” disqualifications
apply
“Bad actor” disqualifications
apply
Investor requirements
Up to 35 sophsticated but
non-accredited investors
Issuer must take reasonable
steps to verify that all
purchasers are accredited
None
SEC filing requirements
Form D, additional
information for
non-accredited investors
Form D Form D
Restrictions on resale Yes, restricted securities Yes, restricted securities
Yes, restricted securities
except in limited
circumstances
Preemption of state
registration or qualification
Yes Yes No

26. Regulation A+ 2626
Tier 1 Tier 2
Offering limit within a year $20 million $75 million
General solicitation
Permitted; before qualification, testing the waters permitted before and after the
offering statement
Issuer requirements US or Canadian issuers
Investor requirements None
Non-accredited investors limited to the
greater of 10% of annual income or net
worth
SEC filing requirements
Form 1-A including two years of financial
statements. Exit report.
Form 1-A, including two years of
audited financial statements. Annual,
semi-annual, current, and exit reports
Restrictions on resale No No
Preemption of state registration or
qualification
No Yes

27. Regulations S and CF 27
Regulation S Regulation CF
Offering limit within a year None $5 million
General solicitation
Permitted; no directed sales
efforts made in the U.S.
Permitted with limits on advertising after Form C is
filed
Issuer requirements
Must offer and sell securities
outside of the U.S.
Excludes non-US, blank-check, reporting, and
investment companies. “Bad actor”
disqualifications apply
Investor requirements Non-U.S. person Limitations based on annual income and net worth
SEC filing requirements None
Form C, including two years of financial statements
that are certified, reviewed or audited, as required.
Progress and annual reports.
Restrictions on resale 12-month resale limitations 12-month resale limitations
Preemption of state registration
or qualification
No Yes
27

28. Regulation of Digital Securities Varies Around
the World
2828
China
Token sales are currently banned in China,
but legal in Hong Kong
European Union
Token sale will fall under the EU’s
pan-European securities laws as laid out in
the prospectus directive and regulation
Switzerland
Digital tokens that promise a claim on a
company’s assets or future cash flows will
be classified as securities under Swiss law
Singapore
Security token offerings fall under local
securities laws as set out by the Securities
and Futures Act (SFA)

29. Malta Is Now a Haven for Blockchain Companies
29
VFAA
Virtual Financial Assets Act
● Purpose: Established with
the sole aim of regulating
Initial Coin Offerings
● Scope: Governs ICOs,
cryptocurrency exchanges,
wallet providers, and all
platforms relating to
cryptos
MDIA
Malta Digital Innovation
Authority Act
● Purpose: Established to
ensure credibility and
provide legal certainty to
consumers of DLT
platforms
● Scope: Certifies
Distributed Ledger
Technology platforms
ITASA
Innovative Technology
Arrangements and Services Act
● Purpose: Established with
the purpose of certifying
DLT platforms
● Scope: Deals with
exchanges and other
companies operating in the
cryptocurrency market

30. Digital Securities:
Current Solutions
30

31. Press Coverage Regarding Digital Securities 3131
Nasdaq Is Planning A Tokenized Securities Platform
“The new plan involves building a platform that allows it to issue security tokens as well as
facilitate trade”
SEC Issues Detailed Statement on Tokenized Securities
“The SEC is open to allowing blockchain technology to develop and add to the richness of the
market buyt warns security token issuers to stay within the bounds of existing regulations.”
Singapore is Ready to Settle Tokenized Assets
“The Singaporean financial regulator and Singapore Exchange have developed a Delivery
versus Payment (DvP) solution with capabilities for tokenized assets settlement”

32. US focused Issuance Platform
Successful cases include SPiCE VC, BCAP,
Lottery.com
Major Digital Securities Issuance Provider
3232
Investors
Blockchain Capital, Ripple, Coinbase Venture and
OKEX Capital, 8 Decimal Capital
Valuation
$12.5m raised at $50m valuation

33. First Major Asset in NYC to be Tokenized on ETH 3333
Tokenized $30 million building
with 12 units located on 436 & 442 E 13th Street in
the East Village
Benefits
“We can remove the unruly pressure of traditional
bank financing, which is much healthier for the
project and all of the stakeholders.”
- Ryan Serhant, Listing Agent
This digital security complies with Regulation D
rule 506(c)
through issuance completed by the joint
partnership of Propellr and Fluidity

34. First Tokenized Real Estate on Harbor 3434
Owner and Operator
The Hub at Columbia is owned by Convexity
Properties and managed by Core Spaces
Student Housing at the University of South
Carolina
1426 Main Street, 260 Units, 329k SF
Univ. of South Carolina

35. First Public Offering For A Digital Security 3535
Blockchain Capital
Executed a portion of fundraising for their recent
VC fund by issuing a digital token (BCAP)
Benefits
The fund receives the capital needed to invest, yet
investors can exit prior to 10 years by selling the
token
Tokens are highly divisible
Eliminating the need for minimum investments.
Blockchain facilitates trade in the secondary
market
Token Price on 11/28/18:
$2.68 (up 138% YOY)
Amount Raised:
Token sale reached its hard
cap of $10M within 6 hours
(BCAP)

36. First Digital Security On a US Regulated Trading
Platform
3636
SPiCE VC
Intends to change traditional investing through its
tokenized VC fund model
Benefits
SPiCE token holders get a share of returns from
exits while having a tradable asset
Portfolio
Securitize, Saga, Slice, Graphpath, RNDR, ROX,
INX
(Securitize being their first portfolio company)
Token Price on 8/8/18:
$1.37 (up 37% since ICO)
Amount Raised:
$40 million
(SPiCE)

37. Investors
A16Z, Founders Fund, Pantera
Valuation
Closed Series B in 2018 at a few hundred million
dollar valuation
US-based Issuance Platform focused on real
estate
In Nov 2018 launch their first offering: Hub at
Columbia REIT
Major Digital Securities Issuance Provider 3737

38. US focused Issuance Platform
Focus on Real estate, Energy fund, infrastructure
and food company
Major Digital Securities Issuance Provider 3838
Founder Background
Dan was the former Chief Innovation Officer at the
Defense Intelligence Agency, and John was former
executive at the U.S. Navy
Valuation
Raising pre-series A at a $50m valuation

39. DSO of Mobile Lottery and Fundraising Platform 3939
Lottery.com
Intends to utilize blockchain technology to
enhance its services through instant payouts,
transparency, flexibility, and expansion across
international markets
Benefits
This digitized security produces a financial yield to
token holders based on gross raffle sales
Partners
Securitize and Cashbet have partnered with
Lottery.com to help bring the offering to the
market
Amount Raised:
Currently raising
(LOTTERY)

40. Open-source platform
Specializing in secondary markets for alternative
assets, built to innovate the securities transaction
lifecycle
Team refocused attention on blockchain
OFN team has been working together since 2014,
offering trading, clearing and settlement services
Partnerships and Clients
Republic, Harbor, Polymath, KoreConX, Securitize,
Blockchain Capital, SPiCE VC, Science Blockchain
First US-based Regulated Digital Securities
Trading Platform
4040

41. Thank You
41