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Behind The Scenes: Morfin’s Proof Of Legitimacy And Accountability

March 24, 2020
Due Diligence STO

For investors, doing due diligence on a potential investment is strongly recommended. Obtaining astute and timely feedback on the quality and accuracy of financial information is the foundation of a good decision-making process.

At a minimum, the financial due diligence process should look at:

  • Company history and background 
  • Key deal considerations 
  • The financial performance – Operating effectiveness and earnings quality 
  • Employee strengths/ weaknesses & commitments 
  • The strength of the financial position 
  • Cash flow assessment – now and going forward 
  • Tax due diligence* 
  • Close off / cut off review*

We know all this. And because we want to be as transparent as possible, in this article, we’ll provide you all the details you need in order to make an informed decision.

Morfin, a company registered in the EU

First things first, we want to assure you that behind our project, there is a real company incorporated in the EU. Morfin.io is registered in Luxembourg. Our registration number is B228318, and you can find us at the address 9 Rue Du Laboratoire, 1911, Luxembourg.

You can verify this information on the official RCS (Registre de Commerce et des Sociétés) site. https://www.lbr.lu/

Do we have an EMI license?

An EMI (Electronic Money Institution) license is required for issuing electronic money. The emitted electronic currency can be used outside of the FIAT payment system and must be redeemed by the EMI issuer.. 

The EMI+/AISP+/PISP license allows binding already existing payment bank cards to client sub-accounts. It also makes it possible to issue cards of major vendors (VISA, Mastercard). 

We are in the process of applying for  an EMI/AISP/PISP (Account information service provider and payment initiation service provider) and we expect to be granted  in the first quarter of 2021. Once the application is approved, you will be able to verify its status and validity at https://cssf.lu .

Does Morfin have a CSSF approval ?

On an EU level, there is still no specific legal framework regarding cryptocurrencies and crypto-assets. 

However, Luxembourg’s financial regulator, the Commission de Surveillance du Secteur Financier (CSSF), was a pioneer in the EU with its official “Bitcoin Communiqué 2014”. It stated that even if there is no specific legal framework, the existing traditional financial regulation may apply.

The CSSF can license fintech companies under the following directives:

  • EU Payment Services Directive (EU 2015/2366)
  • EU-compliant electronic money institution Directive license (E-money Directive 2009/110/EC).

Morfin is in the process to get approval from the CSSF, and you will be able verify this information on the official CSSF website. 

Concerning launching a security token offering, Morfin will also consult the regulator before choosing the security type to be offered and the conditions of the sale. This is important in the context of securities issued by a supervised entity. As an example if you have a banking license (PI, EMI, CI) the regulator needs to approve the shareholder structure of the regulated entity. This means if you have floating stock on the market the regulator must approve any shareholder structure significant changes that would result from market transactions, meaning that a security token marketplace solution itself must be approved by regulator for trading shares of supervised entities.

Integration with banks and the PSD2 directive

  • Psd2 is a EU directive that allows third parties to access client information from banks
  • It is meant to break bank monopoly and allows tech companies to develop (payment systems, fintech products etc) 
  • If you are registered as an account information service provider and have payment provider licensing, you can access client information
  • Clients will grant you this permission, similar to the ouath protocols (when you login with your Fb or Google account to a third party app instead of creating a new account)

Why should you get Whitelisted?

Have you ever wanted to participate in an event, but forgot to register? What happened next is you probably weren’t allowed to enter because your name wasn’t on the guest list.

A similar principle applies to Whitelisting. Security tokens are commonly predicted to be the next evolution of blockchain technology, bringing revolutionary advantages to both companies and investors.

One aspect of compliant security tokens involves ensuring that only eligible token holders are indeed holding the tokens. This can easily be achieved through the creation of a list of approved addresses that represent authorized token holders – a Whitelist.

By getting Whitelisted, we guarantee you the following: 

How do we protect your investment:

  • In case Morfin gets traction:

Once a product is delivered and we go to market, we will hopefully start getting traction. Our assumptions are that in two to three years after release we stand a chance of becoming profitable.Once profitable your return of investment can take two forms: if we decide to distribute dividends you will have a direct return as a percentage from profits, or if we decide to reinvest in growth the company valuation will most probably appreciate so the value of your securities along with it.

  •  In case Morfin goes bankrupt:

Morfin tokenizes bonds. In case of bankruptcy, a company like ours will have all its assets sold. The bond holders will have an advantage over the share holders, because bonds are a debt instrument and bond holders are creditors so will have priority in liquidation procedures.

  • In case Morfin is sold or transferred:

Your rights are granted in perpetuity. In case Morfin is sold or transfer, your rights are maintained.

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