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Gemini Exchange Applies for Broker-Dealer License

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Gemini Exchange Applies for Broker-Dealer License

This month, the Gemini exchange applied for a broker-dealer license from the Financial Industry Regulatory Authority (FINRA). The popular trading platform seeks to gain approval from FINRA as an Alternative Trading System (ATS). If successful, the Gemini exchange would be amongst an exclusive class of FINRA approved crypto organizations.

Regulatory-Friendly Approach

Gemini’s approach to the market has been to include regulators throughout every step of the platform’s development. In 2015, Gemini first received approval from the New York Department of Financial Services (NYDFS) to custody digital assets. The exchange was among the first to receive this licensing. Consequently, the exchange has held a strong position in the market.

Since that time, Gemini has sought approval on a number of occasions including when adding new tokens. For example, the exchange decided to seek NYDFS approval to add Bitcoin Cash (BCH) to the platform in December 2018. Now, the company wants to extend its approval to the national stage.

Gemini Exchange via Homepage

Gemini Exchange via Homepage

FINRA Delays

While Gemini continues to push for national approval, FINRA continues to drag their feet. Currently, there are 40+ applicants awaiting FINRA approval for blockchain-related projects. Unfortunately, the organization appears to be hesitant about supporting these firms at this point. Importantly, FINRA issued a statement this week discussing the approval process and the delays.

Past Strategies

Gemini employed some unique strategies to date in order to service the growing demand for regulated security tokens. Previously, the platform partnered with Harbor to allow investors to purchase digital securities. For its part, Harbor provided users access to the platform’s stable coin – GUSD. Investors would make purchases and receive dividends using this stable coin.

In a recent interview, Harbor’s CEO, Joshua Stein took a moment to discuss the growing demand for security tokens by traditional investment firms, and why Gemini’s strategy is more efficient. He praised the firm’s pro-regulatory approach before describing how the new regulations altered the market since 2017.

An Inclusive Strategy

While many of the details of the company’s plans remain private, there are reports that indicate the platform will allow third-party securities to trade. If this is the case, you can expect to see Harbor as one of the main companies to take part in the exchange’s expansion.

Winklevoss Twins

The Gemini exchange is owned by the famed Winklevoss twins. These Harvard school graduates have long been pioneers in the crypto-space. Notably, in Dec 2017, the twins became one of the first official Bitcoin billionaires. Since that time, the Cameron and Tyler Winklevoss continued their crypto aspirations, which led to the founding of the Gemini exchange.

Gemini Aims High

The Gemini exchange seeks to be the dominant exchange in the crypto-sphere. If the firm is able to leverage its vast experience and network, it’s possible that FINRA may approve the company’s strategy moving forward. Regardless of the outcome, you can expect to hear more from this innovative platform in the coming weeks, as the security token sector continues to heat up.

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David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com

Exchanges

Atomyze Announces Soft-Launch of Tokenization Platform

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Go for Launch

While there are various tokenization platforms already in existence – and more on the way –  one of the more anticipated is that of Atomyze.

The TokenTrustAg product has just announced the test-launch of their service.  The main driving factor behind anticipation of this platform falls back on their established relationships.  For instance, Vladimir Potanin, Russia’s richest man and President of Norilsk Nickel (Nornickel), has publicly stated his intent to tokenize various commodities for trading on the platform.

It should be noted that the test period of the Atomyze platform is limited to businesses only; Specifically those businesses which comprise their list of partners.

The company notes that upon receiving full licensing, operations will expand to include a larger scope of investors.

Capabilities

Tokenization of assets is not restricted solely to securities.  Use of blockchain and DLT can be extended to basically anything of value – including commonly traded commodities.

Regardless of the underlying asset, Atomyze notes that by utilizing blockchain and DLT, clients of their platform will benefit from a variety of capabilities, including, but not limited to, the following.

  • Permissioned view of transactions
  • Increased speed of transactions
  • Financing
  • Bridging between companies and investors

Assets from the ‘Get-Go’

While there are many assets expected to populate the Atomyze platform in time, there are three notable commodities which will be available during this testing phase.

  • Palladium
  • Cobalt
  • Copper

Each of these are key assets to Nornickel and their operations.  As such, each will be tokenized, with investors gaining the ability to trade these asset backed tokens.

Partnering Up

As we alluded to earlier in this article, Atomyze has managed to establish an impressive list of partners in their attempt to create something special.  While the presence of Vladimir Potanin and Nornickel is important on its own, the following companies are also in the mix – bringing clout and potential to Atomyze.

  • IBM
  • Umicore
  • Trafigura
  • Global Palladium Fund
  • Traxys

Commodities vs. Securities

Beyond the intrigue provided by their achievements so far, through Atomyze, TokenTrustAg has no intention of restricting themselves to dealing in commodities alone.

The company is currently in the midst of applying for multiple designations which would allow for them, and their subsidiaries, to delve into the world of tokenized securities.  If successfully awarded, these designations will see TokenTrustAg become both a ‘self-regulated organization’, as well as a licensed securities firm within Switzerland.

Commentary

Upon announcing their test-launch, representatives from Atomyze, as well as various partners, took the time to comment.

Marco Grossi, CEO of Atomyze, stated,

The main idea of tokenization is not in buying or trading cryptocurrencies; it lies in the creation of a modern and transparent mechanism for digitizing of assets, and in the creation of new digital markets, where tokenization is a service helping issuers transfer rights to their assets into a digital form.

Manish Chawla, Global Managing Director of Energy & Natural Resources Industries at IBM, stated,

“The joint efforts among Atomyze, IBM and Nornickel have made it possible to develop a truly powerful and unique industry solution. Asset/commodity trading is only one of many opportunities in our industry where tokenization can transform current business processes…As the leader in the creation of permissioned and governed private blockchain networks for industry outcomes, we are eager to help advance the idea of a new token-based economy with this project.”

The Tycoon

Vladimir Potanin is a Russian tycoon known for his great wealth.  Wealth that was made possible through mining giant, Nornickel, where he serves as President of the company.  In 2020, it is believed that his wealth tops $27 billion, making him one of the richest individuals in the entire world – and the richest in Russia.

He took the time to elaborate on his view of digitization, and how Nornickel is setting themselves up to remain competitive in the future through Atomyze.

The economy is being digitalized, that is to say, the flow of capital is spilling over from the traditional economy to the digital one. Nornickel invests in a variety of digital solutions for industrial applications. The tokenization of payment settlements is one of them. Nornickel will be the first company among the extractive industry leaders to begin trading using tokens. Nornickel is interested in this project because it will enable the Company to popularize palladium and other metals by transitioning to digital trading methods.”

Atomyze

Above all, Atomyze operates as a tokenization platform, while maintaining headquarters in Zug ‘crypto valley’ Switzerland.  The company functions as a product of TokenTrustAg.  A full launch of services is expected sometime in late 2020.

CEO, Marco Grossi, currently oversees company operations.

In Other News

For now, the launch of Atomyze sees operations performed within test-mode only.  This will provide platform clients time to familiarize themselves with its offerings, in anticipation of a late 2020 live-launch.

This wait until late 2020 is partly due to impending changes surrounding Russian regulation of digital assets.  We recently took a brief look at Russia’s goal of amending previous regulations, in an attempt to modernize their approach.

Bank of Russia Looks to Retcon Regulations Surrounding Digital Assets

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Blockstation and Jamaica Stock Exchange Go Live with DSO Integration

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Ready, Set, Go!

In a pilot program that dates back to 2018, the Jamaica Stock Exchange and Blockstation were able to demonstrate the future potential of digital securities.

Fast forward to 2020, and this relationship has paid dividends, as the pair has just announced the official launch of their new platform.

Through a series of services, Blockstation can host digital securities offerings (DSOs) for companies in search of capital through the Jamaica Stock Exchange.  As a result, this capability brings Blockstation into rarified air, as they become one of very few tokenization platforms working so intimately with a traditional, regulated exchange.

Platform Offerings

While the new platform is being touted as a comprehensive ‘end-to-end’ solution, Blockstation decided to focus on a few key features/benefits on offer.  The following points are drawn directly from their announcement.

  • Built-in Know-Your-Client (KYC) and Anti-Money Laundering (AML) functionality to satisfy regulatory obligations
  • Prospectus+ Smart Listing Accelerator Portal streamlines the creation of complete and compliant disclosure documentation
  • Centralized digital filing and communication between all stakeholders to complete the IPO
  • Real-time reporting  and trade monitoring to mitigate abusive market tactics
  • Dramatically reduced costs and timelines to conduct an IPO

Champing at the Bit

Building on the positivity surrounding the integration of Blockstation and the JSE, is the fact that various companies are already getting their ducks in a row to take advantage.

Despite just going live, there are already 5 companies being assessed for a potential DSO hosted by the JSE.

Caribbean Presence

Perhaps because of their successful relationship with the JSE, Blockstation also finds themselves making inroads into another Caribbean nation – Barbados.

We previously reported on an MOU between the pair at roughly the same time as the pilot with the JSE.  With the announcement of a finalized integration between Blockstation and JSE just occurring, will we soon see a similar announcement involving the Barbados Stock Exchange?

Eyeing Digital Securities, Barbados Stock Exchange Chooses Blockstation

Commentary

Marko Hafez, CEO of Blockstation, states,

“We are excited to officially launch the Prospectus+ Smart Listing Accelerator Portal for issuers to tokenize their equity and list on a regulated stock exchange…The portal features low costs, short timelines and international reach, making Tokenized IPOs suitable for companies of all sizes and an attractive proposition for issuers who never would have considered going public in the past.”

Marlene Street Forrest, Managing Director of JSE, states,

“Blockstation’s platform incorporates familiar compliance rules to ensure a fair marketplace. We have spent considerable time and effort in our quest to move forward with Blockstation and to date, the training and support they have provided have been excellent.”

BlockStation

Founded in 2015, Blockstation maintains headquarters in Toronto.  The team behind Blockstation work to develop solutions meant to integrate traditional exchanges with blockchain based technologies.

CEO, Marko Hafez, currently oversees company operations.

Jamaica Stock Exchange

Founded in 1969, the Jamaica Stock Exchange maintains headquarters in Kingston.  This regulated exchange has become the nation’s de facto trading platform since being launched roughly 50 years ago.

Managing Director, Marlene Street Forrest, currently oversees company operations.

In Other News

Over the past year, we have reported on various developments surrounding Blockstation.  Whether establishing partnerships with exchanges, establishing industry framework, or attempting to lure athletes to the great white north, the company has remained busy.

Blockstation Joins the IIROC

Blockstation to Host DSO in Attempt to Lure Kawhi Leonard

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MERJ and OpenFinance Expand on Asset Listings

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Liquidity for All

The promise of digital securities becoming liquid assets is a wonderful thing.  There is a major issue plaguing the sector to date, though – a lack of listings on secondary markets providing a home for these tokens.

While progress may seem slow to some, this is changing.  This past week has brought multiple examples of this, as two digital asset exchanges have each announced the addition of new, differently structured, listings to their platforms.

Expansion of Listings

Investment Evolution Corporation (IEC)

With a specialty in facilitating both loans, and crypto based remittance, IEC saw MERJ as an ideal home for listing.  With the exchange already supporting various digital securities, the addition of IEC’s 106million common shares provides even more diversity among their offerings.

While this particular listing is not a security token, the company deals specifically with crypto and blockchain based endeavours.  Furthermore, it builds on the expansion of offerings seen through MERJ – an expansion which directly benefits the security tokens that ARE listed on the exchange.

Paul Mathieson, Founder of IEC, states,

“After extensive global jurisdictional research, we are very excited to have listed our company on MERJ, the world’s leading regulated, blockchain-friendly stock exchange located in the middle of many future high growth areas. We view this listing as a great opportunity for institutional investors seeking exposure to the fintech, blockchain and cryptocurrency sectors by providing the ability to invest in the company equity of a licensed business on a regulated traditional stock exchange.”

Lottery.com (LDCC)

Gamifying charity through blockchain – this is what Lottery.com is all about.  After hosting a successful STO with the help of partners like Securitize, Lottery.com is able to leverage their LDCC tokens as a means for achieving ‘humanitarian needs’.

Unlike the above asset listed on MERJ, LDCC is a full-on security token.  By attaining this listing, LDCC now becomes accessible to, not only accredited investors based in the U.S., but non-accredited investors, as well.

Tony DiMatteo, CEO of Lottery.com, states,

“We believe that digital security offerings are the future of fundraising. The transparency inherent in this type of offering aligns with our overall mission…By listing on the Openfinance global platform, we’re not only able to offer this unique type of asset to our current investors, but now we’re able to reach a broader set of investors. However, investors aren’t the only beneficiaries.”

Speaking With…

In the past, we have been fortunate to have interviewed the CEOs of each, OpenFinance and MERJ.  While these discussions date back to 2019, they are as relevant today as they were then.

Interview Series – Juan Hernandez, CEO of OpenFinance

Interview Series – Ed Tuohy, CEO of MERJ

OpenFinance

Founded in 2017, OpenFinance maintains operations within the United States.  Above all, the company works to provide services tailored towards the digital securities sector;  Primarily as a secondary market / digital asset exchange.

CEO, Juan Hernandez, currently oversees company operations.

MERJ

Founded in 2011, MERJ operates out of the island nation of Seychelles.  The team at MERJ has established themselves within the digital securities sector, by attaining multiple ‘firsts’ within the industry – such as hosting an IPO through equity based security tokens.

CEO, Ed Tuohy, currently oversees company operations.

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