The First of Its Kind: Securing Shares of Ownership on Blockchain

Simon Read

December 16, 2022

December 8th may go down in history as the day that blockchain finally came of age.

On December 8th Hassam Khawaja received something extraordinary. He became the first owner of shares in a private company that were recorded on the blockchain in a unique way.

Whilst there is nothing new about recording transactions on the blockchain – we’ve seen it with properties, with non-fungible tokens and with cryptocurrencies – this transaction was unique because Hassam became the first person to receive shares that were connected to his validated identity.

A new, secure way to handle shares of ownership, using blockchain

Through a process of know-your-client identity verification, as most of us are familiar with when we open a new bank account, using a passport identity check, a ‘selfie’ and other security checks, Hassam was able to prove his identity and have this recorded on the blockchain together with his shares to create both an irrefutable record and proof of ownership. In effect, the shares and the legal owner’s identity are locked together in a way that prevents them from ever being stolen or lost.

An added layer of protection

This makes the ownership of shares in public and privately traded companies more secure than traditional share ownership and transfers. A person can’t lose the shares or have their digital wallet hacked and the shares stolen by a bad actor.

The technology behind the transaction is KwikTrust, a blockchain start-up operating out of Silicon Valley and London. KwikTrust’s CEO, Simon Read, said “this is a really interesting first case study for the technology. We were able to create and validate the asset, lock it to Hassam as the legal owner and transfer it securely to his digital wallet. Our view is that we can use this proof-of-concept to open up new asset classes.”

“This first transaction can open the doors to public trading exchanges not just for shares but also for other financial instruments and indeed any asset that needs to be bought and sold securely in a digital world.”

December 8th may go down in history as the day that blockchain finally came of age.

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