Advent Prime and Saint Joseph Trust Company have partnered to offer an innovative evolution in asset tokenization. By using the blockchain minting and management software developed by Advent Prime, Saint Joseph Trust Company is able to expand its traditional role as a licensed fiduciary, custodian, and escrow agent into the realm of asset tokenization and introduce the Tokenized Digital Offshore (TDO).

The TDO is an investment solution which, through the issuance of an asset token and supported by the client’s own assets, ensures efficiency, deferral, privacy, and security when investing. It uses the SJ tokenization protocol, meticulously designed to be in perfect keeping with securities regulations in both the United States and Brazil, so that clients can rest assured their investments will be maximally protected and private.

The SJ tokenization protocol relies on licensed entities and wellrespected legal frameworks to support that the rights granted under its underlying agreements are fully enforceable and that clients are truly secure.

The TDO is the future of secure offshore investment.

The SJ Tokenization Protocols

The asset tokenization offered by the partnership between Saint Joseph Trust Company and Advent Prime gives individuals the ability to enjoy the benefits of tokenization while being secure in the guarantees offered by United States and South Dakota contract and privacy laws. This partnership gives users the assurance that their assets are protected by the laws of one of the most secure jurisdictions in the world.

The SJ tokenization protocol was meticulously developed by experienced international attorneys to create a structure that would provide maximum benefit to clients while fully complying with the laws of multiple jurisdictions. We looked at the law first and developed the technology around it.

We produced a true market innovation. Our team isn’t answering “can it be technicallydone?” We are exploring how best to put forth a lasting and sustainable legal investment solution.

This innovation is accomplished by utilizing the issuance of new ERC-20 tokens and digital financial arrangements.

The Process

One of the core aspects of the Advent Prime tokenization protocol is its absolute operational simplicity. New clients engage with Advent Prime through a Terms of Service (TOS) agreement for the issuance of a new ERC-20 token.

These tokens are unique new issuances of fungible tokens which comply with the definition of digital coins. They are unique digital assets that may be used as a medium of exchange, unit of account, or store of value.

The tokens are held under a DFA, or digital financial arrangement. These arrangements are fiduciary agreements wherein clients themselves may appoint advisors to manage the assets, but which are administered under Saint Joseph Trust Company’s fiduciary licenses. These DFAs exist to custody and manage assets.

Clients will then transfer the assets they wish to tokenize to be held under these DFAs in exchange for the newly minted digital currency. This exchange is governed by the terms of an Exchange Agreement, itself maximally protective of the client. All these relationships are governed by the TOS, DFA, and Exchange Agreement, which anchor the digital protection and transparency of the blockchain in centuries-old U.S. contract law.

Central to a client’s relationship with Advent Prime is the issuance of a PrimeID Token. The PrimeID Token is a unique identity token which serves to offer maximum protection and privacy to clients engaging in tokenization.

These tokens represent the Terms of Service for the issuance of a token by Advent Prime, custody by Saint Joseph Trust Company, and advisory services by a listed advisor. They identify the token holder and the core relationship that token holder has with the assets as defined under contract.

PrimeID Tokens are unique identifiers for users of Advent Prime. The issuance of this token signifies that the user has undergone the stringent compliance procedures employed by Advent Prime and Saint Joseph Trust Company. These tokens allow users to privately enter into other agreements, heightening protection from the public, while also ensuring other parties to these agreements that the holder of the PrimeID Token has passed strict KYC, antimoney-laundering, and anti-terrorism controls.

The Terms of Service (TOS) agreement which leads to the creation of the PrimeID Token, and which is registered on the blockchain when the PrimeID Token is issued, signifies the client’s, custodian’s, issuer’s, and advisor’s duties over the assets used in conjunction with the token.

By requiring all clients using the Advent Prime platform to obtain a PrimeID Token, we offermaximum certainty to clients that other users of the platform have been thoroughly vetted.

A Digital Financial Arrangement, or DFA, is a digital contract with minted terms governing a PrimeID Token holder’s relationship with Saint Joseph Trust Company.

DFAs can hold any kind of asset, such as publicly traded securities, privately held companies, rights under contracts, etc. These agreements govern both the terms of custody and management of the assets, ensuring the principal party of the DFA has secured their assets, while maximizing fiscal efficiency and privacy. Every DFA has an associated individual Asset Token issued to it at
its inception. This guarantees that the DFA is not only a digital financial agreement but also an agreement for the administration of a digital asset.

DFAs are either created by a PrimeID Token holder, a corporate person related to the PrimeID Token holder, or decanted from an advisor’s fiduciary custody account. It can be made to the benefit of the constituting entity, the PrimeID Token holder, members of their family, or groups associated with them by determination of the listed advisor. This ensures that the assets held under
the DFA are maximally protected and their interest retained directly or indirectly for the client and their successors.

Standard drafting of these agreements is made to offer maximally protective structures for the account holders’ assets while ensuring maximum legal privacy.

The asset token is an ERC-20 token which is issued to be held under a DFA. This coin is fully fungible and held in wallets by Advent Prime on behalf of the DFA.

Asset Tokens are transferred to wallets belonging to the PrimeID Token holder at the moment their assets are transferred into the DFA. This ensures that the client owns the Asset Token as their reportable asset.

Asset Tokens are subject to an agreement between the DFA and the PrimeID Token holder whereby the PrimeID Token holder may redeem Asset Tokens against assets held under the DFA. Exchange of Asset Tokens is limited to the client and subject to the approval of the appointed advisor of the DFA.

This relationship is governed under an Exchange Agreement detailing the rights the transferor has over the exchange of assets, regardless of beneficial interest in the DFA.

Clients who are issued the Asset Token against assets transferred to be held under a DFA are required to report their ownership of this token.

Any time we talk about the issuance of a digital asset, it is fundamental that applicable securities laws are respected. Any definition of marketable securities in the U.S. is subject to the Howey Test.

PrimeID Tokens, DFAs, and Asset Tokens are designed not to be registerable securities under the Howey Test. The U.S. Supreme Court in SEC v. W.J. Howey Co. (1946) classifies a transaction as a security if it involves (1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits, (4) derived from the efforts of others.

Asset Tokens and PrimeID Tokens fail this test because they are structured with: 1 – limited transferability, 2 – marketed for asset protection and privacy, 3 – no direct representation of beneficial interest in DFA-held assets, and 4 – guaranteed client control through retained powers of appointment.

These tokens exist for secure asset management, not speculation. Protected by U.S. and South Dakota contract and privacy laws, the tokens are marketed as asset protection tools and are not designed for investment growth.

The purchase and sale agreement underlying the Asset Token, and the Terms of Service agreement underlying the PrimeID Token, are custodial and transactional tools enabling clients to exchange assets for tokens for protection purposes, not investment, failing the Howey Test’s “expectation of
profits” prong.

The tokens’ non-security status is reinforced by the client’s control over the DFA and the tokens’ lack of direct representation of beneficial interest, reducing reliance on third-party efforts under the Howey Test.

Clients can appoint and reappoint DFA advisors at any time, directing the DFA’s management to align with their asset protection goals, ensuring decisions reflect their intent—not those of Advent Prime or Saint Joseph Trust Company.

The Asset Token is a coin traded against assets, with client rights limited to potential resale to the DFA. Even if a common enterprise exists through Advent Prime’s platform operations, the absence of profit expectations and minimal third-party efforts places the tokens outside the definition of securities.

Designed by experienced attorneys for legal compliance, the Advent Prime tokens serve as a robust asset protection mechanism, fully adhering to U.S. securities law.

The Tokenized Digital Offshore, or TDO, is a project to use asset tokenization through Advent Prime to create a modern alternative to what was traditionally done by offshore companies. The idea developed after sweeping legislative changes around the world made offshore corporate structures less private, less efficient, and less secure.

The TDO allows users to invest their money, custody private investment companies, or effect or receive payments through a digital arrangement alternative to traditional offshore corporate structures. These digital arrangements are not registered in government registries and are not
subject to exchange-of-information agreements.

The values of these arrangements are privately accounted for in public blockchains, which give users direct access to up-to-date accounting information while limiting who can view that accounting. In other words, you control your data.

A TDO is organized as a standard asset token in conjunction with a DFA. These DFAs have the specific purpose of holding and protecting assets and are not drafted as complex agreements with broader objectives.

The ideal DFA for the TDO is a tokenized trust. The simplified trust agreement is drafted so banks can easily recognize the structure and efficiently hold a variety of assets, including investment accounts and real estate.

The DFA of the TDO is a flexible tool that can be organized to efficiently minimize reporting requirements for PrimeID Token holders.

Account holders’ reporting will primarily concern Asset Tokens associated with the DFA.

The Tokenized Digital Offshore (TDO) offers unparalleled privacy for clients seeking to protect their assets, leveraging the robust legal frameworks of South Dakota and the United States to ensure confidentiality without compromising compliance.

Under South Dakota Codified Law, trusts like the Digital Financial Arrangement (DFA) benefit from stringent privacy protections that shield settlor and beneficiary identities from public disclosure.

Unlike traditional offshore structures, DFAs require no state or federal registration of settlors or beneficiaries, ensuring that sensitive financial information remains private and inaccessible to unauthorized parties.

This statutory privacy, combined with the TDO’s blockchain-based accounting, restricts access to asset details to only the client and their appointed advisor, providing a secure and discreet solution for wealth management.

The TDO’s privacy advantages are further enhanced by the United States’ unique position in global financial reporting. The U.S. is not a signatory to multilateral agreements on the automatic exchange of information, such as the OECD’s Common Reporting Standard (CRS), which mandates data sharing among participating jurisdictions.

Additionally, bilateral agreements under the Foreign Account Tax Compliance Act (FATCA) do not require reporting on trust structures like DFAs, as they focus on accounts held by U.S. persons in foreign jurisdictions, not domestic trusts.

This exemption ensures that TDO clients’ financial arrangements remain outside the scope of international data exchanges. Compared to traditional offshore structures, which often involve public accounting records and additional reporting obligations, Asset Tokens streamline compliance by requiring only ownership reporting, as mandated by applicable tax authorities.

By integrating South Dakota’s privacy laws with blockchain’s cryptographic security, the TDO delivers a modern, private alternative to outdated offshore vehicles, empowering clients to control their data with confidence.

Perhaps one of the biggest surprises of 2023 was the Brazilian government’s 180-degree paradigm shift regarding the treatment of offshore assets. Brazil had traditionally given complete tax deferral to offshore structures held by Brazilian citizens. This meant that assets held by an individual’s offshore company would generally not be taxed until such time as the individual distributed funds exceeding those contributed to the offshore structure.

The law changed this treatment by forcing transparent treatment for passive companies with investments abroad.

This change left many Brazilians who stored their wealth abroad as a hedge against economic uncertainty uncomfortable with what their tax liability would be in the following years.

In March 2024, through an expansion of the Brazilian revenue service’s rulings on the treatment of financial investments and cryptocurrency, individuals were offered a light at the end of the tunnel. This light came in the form of a ruling that digital financial arrangements would be treated with opacity, meaning individuals would not owe taxes from these arrangements until such time as they liquidated their tokenized assets.

Brazil paved the way for the PrimeID Token, DFA, and Asset Tokens as TDO.

The Brazilian revenue ruling known as IN RFB nº 2.180/2024 detailed that financial investments held outside Brazil by Brazilians would be treated with deferral until such time as these investments led to a realized gain. Investments in the ruling included a broad spectrum of investment types, among them digital financial arrangements.

Article 9, §1 of the ruling details that these financial arrangements include interest-bearing digital wallets or a digital representation of another financial investment abroad.

§2 details that these digital representations will be considered foreign despite where they are issued.

§3 details that realized revenue from these arrangements will be taxed in accordance with Article 10 of the ruling, which itself imposes a 15% flat tax on gains realized.

This section made it so that investments and other assets held in DFAs as wrappers would have a more beneficial treatment than the treatment offered by offshore companies in the past.

They not only allowed the beneficiaries of these DFAs to have tax deferral until such time as they realize gains, but they also tax those gains at 15%.

Saint Joseph Trust Company, in partnership with Advent Prime, simplifies asset tokenization by converting clients’ real-world assets into digital tokens on the Ethereum blockchain. Through the SJ Tokenization Protocols, clients transfer assets to be held under a Digital Financial Arrangement (DFA), a secure trust or custody agreement managed under Saint Joseph’s fiduciary licenses.

Advent Prime issues Asset Tokens, which clients can use to manage or redeem their assets, with all transactions recorded on the blockchain for transparency and security. This process is streamlined by the versatile legal contractual framework.

The benefits for clients are clear: tokenization enables private, efficient, and secure asset management, protected by robust legal frameworks that minimize fraud risks.

Clients gain flexibility to hold assets digitally, maintain privacy through blockchain-based accounting, and enjoy potential tax advantages, such as Brazil’s 2024 tax deferral for digital financial arrangements (IN RFB nº 2.180/2024).

The Tokenized Digital Offshore (TDO) offers a modern alternative to traditional offshore structures,providing a compliant, user-friendly solution for safeguarding wealth and managing investments with confidence.