Ross Shemeliak of Stobox Tells Us About Securities Tokenization and Digital Assets

First of all, how are you and your family doing in these COVID-19 times? 

Ross Shemeliak: Currently, I am in Kyiv, Ukraine, one of the TOP-5 of the most infected countries in Europe. I have recently recovered from the coronavirus. I got COVID simultaneously with my girlfriend, so we spent 3 weeks together in the same apartment; given that both of us were remote employees, it was not easy. Fortunately, the only symptom I had was a fever.

Tell us about you, your career, how you joined Stobox.

Ross Shemeliak: Since high school in Kyiv, I have been very interested in Economics, which prompted me to study it in depth. I spent 2 years in Germany, where I continued to study economics at the Gymnasium “In der Wüste.

I started my career in finance in a company that advised clients on investments in the US stock market, oil, and cryptocurrencies. I’ve also practiced traditional and crypto trading. In all workplaces, I grew to be the team leader in a record short time.

Monitoring the trends of blockchain, I learned about STO. I started digging deeper and recognized their huge potential. A friend of mine offered me to participate in the Stobox project, and I was glad to join. 

How does Stobox innovate? 

Ross Shemeliak: We are an award-winning technology and advisory company in the field of securities tokenization and digital assets. Tokenization is a technology that transforms business financing, reduces the cost of capital, opens for investors access to investment opportunities that were out of reach, and makes it possible to automate legal compliance. It is embraced by companies such as the London Stock Exchange, World Bank, and HSBC.

We are already two years on the market and have been focused on the development of the infrastructure that would allow tokenization to be convenient and deployed on the scale. During this time, we conducted around 5,000 hours of research of industry landscape, technical and legal nuances; tested several blockchains, including IBM’s Hyperledger Fabric; conducted 500+ hours of conversation with partners and potential clients; worked with several governments. 

Our distinctive feature is expertise in tokenization, finance, securities law, and blockchain. The big problem is that the investment process is complex and includes many operations – KYC, sending invoices and receiving funds, signing legal agreements, sending tokens, setting investment limits, recording securities ownership, etc. After that, issuers have to communicate with investors, share reports, pay dividends, organize voting. Due to this complexity, very few offer their securities to a wide public, especially in the early stages.

Stobox Dashboard automates or streamlines the processes above, making all relations with investors drastically simpler. Therefore, crowdfunding becomes a much more viable option. Our dream is that anyone could walk into the new coffee shop in your street and invest in it a hundred bucks if you liked the coffee and the owner. This is a completely new paradigm of investing and business financing.

How the coronavirus pandemic affects your business, and how are you coping?

Ross Shemeliak: When COVID began, we were already developing our technical solution based on a private blockchain; with the advent of COVID, we more clearly saw the problems our technology faced – the flexibility of the technical side and the perception of customers. So we had to move away from the technology we were developing and start from scratch.

We faced financial difficulties, we had to cut salaries for our employees but decided not to fire anyone and look for all sorts of ways out of the situation. During the lockdown, all staff worked remotely.

We had to focus on looking for funding and solutions that would enable us to bootstrap and continue the development of our product. The company cut the marketing budget and minimized all the other expenses.

We tested more than 10 hypotheses during this time, launched 3 consulting products, and spent more than 1,500 thousand hours of research and analytics in the STO direction. In addition, we began to look at the solutions complementary to STO and figured out that online banking business – opening online accounts for the business. The launch of this project had to be postponed, but it allowed us to strengthen our knowledge of finance and understanding of the entire ecosystem and the pains of businesses. Instead of hiring quite expensive development contractors, we had to set up an in-house department that could start developing our new technical solution on top of the Ethereum infrastructure.

The full transition to remote work went smoothly for us since we had clearly defined workflow processes. Our ecosystem includes Slack, Jira, Google Calendar, Zoom, Dropbox, etc., which allows managing the entire company remotely.

We also started having daily planning meetings during which we discuss agendas for the upcoming day.

Did you have to make difficult choices, and what are the lessons learned?

Ross Shemeliak: In any situation, we should remain humans. Employees are the most valuable asset in any company, especially in one which develops a technological product, where the onboarding process can take a lot of time. Therefore, in any situation, we should find solutions to not lose the team. It is also very important to encourage and value the small achievements that the employees make, especially during the tough times for the company. 

How do you deal with stress and anxiety?

Ross Shemeliak: As for dealing with stress, I personally prefer to exercise regularly, at least 20 minutes a day, this can be done at home. Also, the coronavirus has shown how important it is to maintain mental health, so the best solution would be to meditate to clear your mind and give the opportunity for new insights to come.

Who are your competitors? And how do you plan to stay in the game?

Ross Shemeliak: Our competitors are other tokenization platforms such as Tokeny, Securitize, or Polymath. Our advantage is that we provide a turn-key solution, thus taking away from the client the burden of managing the STO process. The most common and convenient token protocol is ERC-20. However, it is not suitable for regulated financial instruments. The use of conventional protocols creates legal risks and operational complexity for businesses. To make tokenization easier, we designed a security protocol that takes into account legal nuances and makes tokenization easier. We use a more scalable approach where the permissions of an investor are defined by its attributes. For example, if an investor has attributes “US resident” and “professional investor,” and the offering is done under reg D rule 506 (c), it will be eligible to invest but not if it has the attribute “retail investor.” Such a scheme is more scalable and error-proof, with more advanced regulations and operations built-in.

Another main advantage is our ecosystem. We launched DSD sales for the business, a tool that enables a company to issue its securities, manage customer relations, and do digital crowdfunding. 

In the coming months, we will release our crypto exchange, which will allow our clients to conduct all the activities within one ecosystem. We used advanced database management technologies to make it extremely fast and reliable to suit professional algorithmic traders. It also possesses advanced functionality, such as NFT-module and futures trading. To ensure the safety of personal and financial information, we utilize clustered storage technology and add insurance on data. 

We launched our utility token (STBU), with which you can pay for our consulting services and pay commission fees on the exchange. It also makes it possible to participate in obtaining ranks on the exchange and participate in obtaining NFTs. 

Currently, we are going to do a limited sale of our Merch in the NTF format by the end of the year.

To sum up, our main advantage is the use of innovative technologies, our vision, and our common ecosystem in which the client can solve all their pains.

Your final thoughts?

Ross Shemeliak: The world is moving forward fast, and in order to stay competitive, you need to follow trends, keep abreast of new technologies, and learn how it can be applied to your business. This is what will allow large companies to move on and win the market.

Happy to answer any questions. You can contact me via LinkedIn or Telegram.

 My email – rs@stobox.io

Your Website?

Stobox