Business and Operational Considerations in Tokenization BFC Practice Questions (Page 7)

Questions 31–32

1. 31expert · hard

   A security token is listed on a regulated exchange, but trading volume is low. The issuer wants to improve liquidity without violating securities regulations. Which strategy is most effective?

   • AEngage a regulated market maker to provide continuous quotes and ensure that the token is eligible for inclusion in index funds.
   • BIncrease the minimum trade size to attract larger investors.
   • COffer a discount on the token price to encourage trading, without any market maker.
   • DAllow trading on unregulated decentralized exchanges to increase accessibility.
   Reveal Solution Discussion Select an answer first
2. 32application · medium

   A fintech firm is tokenizing a portfolio of commercial real estate debt. The firm plans to offer tokens to retail investors in multiple jurisdictions. Legal counsel has determined that the tokens will be classified as securities in most target markets. The firm wants to minimize regulatory friction while ensuring that token holders have enforceable ownership rights. Which approach should the firm adopt?

   • AIssue tokens on a public blockchain without transfer restrictions and rely on the token standard to define ownership.
   • BIssue the tokens through a regulated security token offering (STO) platform that handles jurisdiction-specific compliance and embeds transfer restrictions in the smart contract.
   • CUse a permissioned blockchain with a single global legal entity to hold the assets, and issue tokens only to accredited investors in one jurisdiction.
   • DStructure the tokens as utility tokens to avoid securities regulation, and rely on contractual agreements for ownership rights.
   Reveal Solution Discussion Select an answer first