😑Loss of Token

A share is a membership right in a company. With tokenization, this right is validly attached to a token, and hence the token represents this membership right.

If a token gets lost this membership right is not destroyed: it is still included in the commercial registry. So how can the former owner still exercise his rights:

The membership right needs to be detached from the token.

Swiss law provides for such a detachment (Art. 973h CO):

How can a token loss be initiated

The beneficiary (the owner of the former token), needs to provide that he used to be the owner, and that he lost the token.

Who decides on cancellation of the lost token?

Only a Swiss court can decide on the cancellation of the lost token. This decision can be appealed through the court system.

What happens if the court approves the cancellation?

The court can oblige the start-up to issue new shares to the rightfully established owner (Art. 986 CO)

What happens with the original token after a court has cancelled it?

Nothing, we don't have any control over this token. However, this token does not any more represent a share, and the owner of this token does not have any rights against the company.

How do you protect people from buying this worthless token?

As the cancelled token has no rights, he has zero value. Nevertheless, there is a risk that people buy this token.

For this purpose we have included a function in the share contract which freezes the tokens in a specific wallet. This prevents people from buying worthless tokens.