Securitize, a provider of technology for issuing blockchain tokens,
has registered as a transfer agent with the U.S. Securities and Exchange
Administration (SEC), a move it says will boost adoption.
Announced Wednesday, the registration means Securitize can now act as
the official keeper of records about changes of ownership in
securities. While that might sound redundant given that blockchains are
supposed to track asset transfers, the San Francisco-based startup says
it’s expedient.
“We can increase the amount of securities issued on the blockchain
and give comfort to people that this is a regulated space,” said Carlos
Domingo, co-founder and CEO of Securitize. “The SEC has also started
approving other types of exempted securities like Reg A+ and down the
road those people will need transfer agents.”
As a further enticement, the company is offering to record transfers
for free, which would normally cost around $150 per transfer for
regular, SEC-registered securities, Domingo said. Securitize will still
charge for the management of securities and corporate actions, such as
dividend and interest payments, shareholder votes and redemptions and
share buybacks.
While SEC approval after its official submission took only 10 days,
Securitize worked for around six months to make sure the regulator
understood how the company’s smart contracts would keep a record of
transfers, Domingo said.
Securitize claims to be the first SEC-registered transfer agent with a
working blockchain protocol, active securities issuers and integrations
that allow digital securities enabled by its protocol to be traded on
SEC-registered alternative trading systems (ATSs), including OpenFinance
Network, tZERO and Sharespost.
$200 million issued
Recently, Securitize announced its eleventh issued and outstanding
digital security running on the platform under its protocol. The total
value of those securities is nearly $200 million, and five of them are
traded on a regulated, SEC-registered ATS.
In two funding rounds, the company has raised $15 million. It has 43
customers, 11 of which have issued securities on the public ethereum
blockchain. Securitize has also integrated with tezos but has no
customers using that chain yet.
Securitize also bills
itself as a one-stop shop for token services with its Securitize Ready
Program, an advisory network that launched in April and includes
Coinbase Custody and OpenFinance to assist in issuance, management, and
compliance.
In May, Securitize open-sourced the code behind its in-house protocol.
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