The 'XSC' Security Token Contract that governs security tokens in the Dusk Network, is designed in such a way to maximize security, and minimize risks of fraud and theft. Shareholders can choose to self-custody and rely on a myriad of measures. One of these measures is the enforcement of whitelists, which only allows registered, and fully-vetted individuals to trade security tokens. Other preventive measures are threshold and multi-signatures that are supported by the wallet software, and the ability of the issuing company to freeze and force-transfer 'misplaced' security tokens at their discretion.
Yet, for institutional investors, high net worth individuals and corporations that is not enough. Additional security measures are warranted against potential threats.