Secondary market

Cashlink is not providing a regulated secondary market!

After investor have purchased digital assets on the primary market from the issuer, they have the possibility to transfer those assets to other investor for example as part of a secondary market trade. These transfers can either be initiated via the platform itself or outside the platform on a decentralized or centralized exchange.

Prerequisites for transfers

To be able to receive assets on the secondary market, investors need to register with a distribution platform where the asset is listed. Thats's usually the platform where the asset has been sold on the primary market.

After successful registration and KYC/AML check the investor sets a wallet address that is added to an on-ledger allowlist for the asset. Once finished, investor's can receive the asset on the wallet address.

Onboarding of investors and wallet creation is either done via the Partner APIs or via the Cashlink Signing frontend depending on your chosen product.

Restricting the pool of investors that are allowed to hold digital securities has many advantages:

• It enables AML and CTF compliance by making sure that only duly checked investor are able to hold assets.

• The allowlist enables you to collect a reference bank account that will be used to credit income payments to the investor.

• You've got direct access to a communication channel with the investor to meet obligations coming from information rights of the investors.

For issuances in the framework of the eWpG, Cashlink as the registrar is required by law to identify each recipient of securities.

After an investor has been onboarded and a wallet address has been created for that investor, the wallet needs to be enabled to receive transfers. This can be done via the Cashlink Signing frontend by the investor or if you use the Partner APIs you can set the value receiving_enabled: True via a PATCH /investors/:id/wallets/:id request.

Tracking on-ledger transfers

The Cashlink Studio allows you to track transfers as they happen on-ledger so that you always stay up-to-date on who owns which parts of the digital asset. You can view the transfer status on the investments details page.

If units that were part of an investment are transferred to another investor a new investment is created for that investment and the data is shown in the Cashlink Studio. You can view which information has been created by viewing the investment details page.

The on-chain data itself doesn't hold information on which investment should be used as the source investment of a transfer transaction. We therefore use the First-In-First-Out logic to determine the source investment. That means that investments made first in time are used first. If the units of the first investment are not enough, we start deducting units from the next investment made after the first one.