> For the complete documentation index, see [llms.txt](https://filmfund.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://filmfund.gitbook.io/docs/platform-architecture-and-functionality/security-token-exchange-and-compliance.md).

# Security Token Exchange & Compliance

### 1. Process for Exchanging $FFA Tokens for Security Tokens:

* Upon achieving the hard cap, $FFA tokens staked on a film project are converted into security tokens. The ratio of conversion is predefined based on the project’s tokenomics and funding structure.
* **Security Token Features:** These tokens represent profit-sharing rights in the film, providing investors with a percentage of the film’s revenue.

### 2. KYC/AML Compliance at the Time of Exchange:

* All investors are required to complete KYC/AML verification through the platform’s integrated compliance module, ensuring adherence to global securities regulations.
* Verification is conducted at the time of security token conversion, making it seamless for backers to move from utility token staking to formal ownership of film-specific equity.

### 3. Ensuring Investor Protection and Regulatory Compliance:

* The partnership with Digishares ensures that all security token offerings comply with relevant securities laws, providing a legally sound framework for tokenized investments.
* FilmFund.io also implements strict data protection and smart contract auditing to safeguard user assets and maintain investor confidence.