Add a Blockchain Trust Layer to Private Corporate Securities

Private company cap tables are chaos masquerading as spreadsheets. What begins as a simple founding stock allocation becomes a labyrinth of preferred rounds, option grants, convertible instruments, and secondary transfers. By Series B, most companies cannot definitively answer who owns what—and that uncertainty compounds with every financing event, employee grant, and investor exit.

Transfer restrictions create friction that destroys liquidity. Private securities cannot trade without issuer consent, legal opinions, and compliance verification. Each transfer requires manual review of accreditation status, holding periods, and contractual restrictions. The process takes weeks and costs thousands in legal fees. Employees with vested equity cannot access that value. Investors are locked into positions for years longer than necessary.

The compliance burden scales exponentially. Each new investor requires KYC verification. Each transfer requires re-verification of restrictions. Reg D offerings demand ongoing accredited investor confirmation. Information rights and voting provisions must be tracked across multiple instruments. Annual reports require reconciliation of cap table with accounting records. A single error can trigger securities law violations.

Audit and due diligence processes reveal the dysfunction. Potential acquirers request cap tables and receive three different versions with three different totals. Stock option exercises lack proper documentation. Early investors appear without subscription agreements. Convertible notes convert at prices no one can verify. M&A deals die or delay while lawyers reconstruct shareholder records that should have been definitive from day one.

Integra's SecurityTokenTokenizer is purpose-built for securities compliance, encoding regulatory requirements directly into token transfer logic.

Regulation D (Private Placements): For Rule 506(b) and 506(c) offerings, the tokenizer enforces accredited investor requirements. Investor accreditation is verified through EAS attestations from approved verification providers. Holding period restrictions (typically 6-12 months) are enforced at the protocol level—non-compliant transfers simply fail. General solicitation rules are reflected in who can receive tokens. Investor caps for Rule 506(b) (35 non-accredited investors) are automatically enforced.

Regulation S (Offshore Offerings): Jurisdictional restrictions are enforced through EAS attestations that verify investor location. Distribution compliance periods are tracked through Lifecycle Resolvers. Directed selling efforts restrictions are reflected in access controls. Hedging transaction limitations are documented in the underlying RWC.

Regulation Crowdfunding (Reg CF): Investment limits based on investor income and net worth are enforced automatically. Annual investment caps are tracked across offerings. Required disclosures are registered as RWCs with cryptographic proof of what was disclosed and when. Intermediary platform requirements are satisfied through verified documentation.

Accredited Investor Verification: Integration with Ethereum Attestation Service enables verified identity and accreditation status. Investors complete verification with approved providers once, receiving reusable attestations that multiple issuers can verify. Re-verification schedules are tracked through Lifecycle Resolvers. Verification status is queryable but underlying personal information remains private.

Ongoing Compliance: The blockchain provides a permanent audit trail satisfying SEC books and records requirements. Information rights are enforced through access-controlled document sharing. Annual verification can re-query attestation status. Bad actor disqualification is checkable against attestation schemas. The compliance infrastructure that would require dedicated staff is embedded in the protocol.