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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

Poloniex Branches out from Circle as ‘Polo Digital Assets’

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Poloniex Branches out from Circle as 'Polo Digital Assets'

Going Global

In a surprise move, Circle has announced that subsidiary, Poloniex, will be spreading its wings and ‘spinning-out’ on its own. This new company will be known as ‘Polo Digital Assets’.

Unfortunately, and unsurprising as Poloniex is U.S. based, the exchange’s customer base within the States will see future access to their services revoked. While this is unfortunate, it is a necessary stance being taken by such companies, due to the regulatory climate within the U.S., to date.

While not nation-wide, rival exchange, Bittrex, recently restricted access to their services for customers living in the state of New York. With the exiting of both of these exchanges from U.S. markets, there now remains a woefully thin selection of North American based exchanges for crypto enthusiasts to trade on.

Infusion

While U.S. based customers may be losing access to services, this move actually represents an expansion of services for Poloniex, themselves, as they will now focus on global dominance.

Circle has indicated that an outside investment group has already earmarked $100M for infusion into services provided by Poloniex.

The team at Poloniex released a statement of their own, separate from Circle, elaborating on their future intentions. In an effort to bring an air of positivity and reassurance around the announcement, the team stated,

“Going forward, we have a multiyear plan to spend more than $100M to develop and expand Poloniex, and we are very excited to continue working with the amazing global community of Poloniex customers. The cryptocurrency revolution has just begun, and we’re in it for the long haul.”

There have been reports that the outside investment group, which is based out of Asia, is being led by TRON founder Justin Sun. This, however, has not been confirmed at this time, and is just conjecture.

Past Purchase

While the driving factors (U.S. regulatory compliance) resulting in the development discussed here today are known issues, the move remained a surprise, due to the timing.

Poloniex was acquired by Circle in a high-profile move, a mere 18 months ago. This acquisition came in to the tune of $440M. While Circle did, indeed, help Poloniex expand services and rebuild a tarnished reputation, most expected a longer time frame of ownership for such an acquisition.

Despite the change of plans, Circle has not wavered in their belief of digital securities. Many believe that the initial intent of the purchase was to see Poloniex act as a secondary market, supporting digital securities distributed through the SeedInvest platform.

Change of Plans

While their approach to the sector may have changed, Circle is still eyeing digital securities as the future, and has indicated that their efforts, moving forward, will be more focused on SeedInvest.

Circle indicates that the following points of interest will also see a ramp up in development as the company looks to develop real-world use cases.

  • Payments
  • Investment
  • Lending
  • Fundraising

SeedInvest

As one of the most successful crowdfunding platforms in the U.S., SeedInvest has the potential to provide Circle with an effective inroads to establishing themselves within digital securities sector.

The platform, which was acquired by Circle in early 2019, has helped a plethora of companies generate crucial funding, to date. Circle indicates that it is their goal to eliminate the divide between traditional finance and blockchain. By marrying the two, they hope to democratize investing, by opening new opportunities to investors of any ilk.

Circle Eyes Tokenized Securities with SeedInvest Acquisition

Commentary

Upon making their announcement, a joint statement was released by Circle Cofounders, Jeremy Allaire and Sean Neville. This statement addressed the rationality behind this move, and how it will help Poloniex mature.

“In an effort to create a competitive internationally-focused cryptocurrency exchange, the Poloniex team and leadership are spinning out from Circle into a new independent international company, Polo Digital Assets, Ltd. Backed by an Asian investment group, the spin-out will bring significant resources and freedom to deliver the product features and marketing strategies needed to be competitive.”

The pair elaborated on their plans moving forward, and the role that SeedInvest will play in them.

“Earlier this year we completed the acquisition of SeedInvest, the largest equity crowdfunding platform in the United States, and have helped hundreds of companies raise hundreds of millions of dollars with internet-based securities offerings. Our plan with this business is to transform how companies raise capital, and open up investment opportunities to people everywhere. We have been working hard to introduce new services built on SeedInvest that allow for fundraising using tokens and digital assets, marrying traditional financial contracts and assets with crypto.”

Poloniex

Operating out of Delaware, Poloniex is a popular cryptocurrency exchange, which was founded in 2014.

CEO, Tristan D’Agosta, currently oversees company operations.

Circle

Circle is a Boston based company, which was founded in 2013. Above all, the team behind Circle is working towards developing a transparent and globally accessible financial system.

CEO, Jeremy Allaire, currently oversees company operations.

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Archax to Streamline Post-Trade Activity through R3 Corda Platform Integration

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DLT Infrastructure

With Archax looking to provide their future clientele with a comprehensive experience, they have recently announced a partnership with R3 Corda.

This partnership will see Archax benefit from services proffered by R3, as they bring the ability to support DLT based post-trade activities.

Archax has indicated that they will be integrating a private version of the R3 platform into their services. While this is being done in an effort to offer an all-in-one solution, it also makes this solution a more cost & time efficient one.

Commentary

In their released announcement, representatives from each, Archax and R3, took the time to comment. The following is what each had to say regarding the partnership.

Graham Rodford, CEO of Archax, stated,

“Our existing systems and partnerships with firms like Aquis, provide the core functionality for our exchange. R3, with its Corda product, provides the final piece of the puzzle on which we can build a truly revolutionary post-trade solution. Although Archax is blockchain agnostic for digital security issuances, we needed an institutional-grade system for our own post-trade use. R3’s permissioned blockchain solution is already used by leading blue-chip organisations so fits the bill perfectly. This partnership will deliver the blockchain efficiency gains for financial markets that are so often talked about, and we believe will be the first of its kind…The current post-trade process in traditional financial markets is hugely inefficient, with many intermediaries involved. This partnership between R3 and Archax will enable us to revolutionise the current post-trade space, removing friction and streamlining activities to improve efficiency and reduce cost.”

Cathy Minter, CRO of R3, stated,

“Working alongside the world’s leading financial institutions, R3 made a conscious decision to leverage blockchain technology to solve real business problems in both complex and highly regulated markets. Representing assets as tokens on a blockchain platform is one of the most impactful applications of the technology and a key focus for R3, too. Archax, with its experienced team and base in London, is building one of the most credible venues for these tokens and will play a key role in driving institutional adoption. As such, our Corda Enterprise platform is ideally-suited for this project, and we look forward to working together to disrupt and revolutionise how financial markets operate.”

Speaking with Graham

We recently had the pleasure of completing an exclusive interview with Archax CEO, Graham Rodford. In this discussion we learn more about, not only Rodford himself, but future plans for the promising Archax.

Interview Series – Graham Rodford, CEO of Archax

Archax

Founded in 2018, Archax is a London, England based company. Above all, Archax is working to establish themselves as an authority within the digital securities sector. The company is soon approaching the launch date of their anticipated exchange for digital securities.

CEO, Graham Rodford, currently oversees company operations.

R3 Corda

Operating out of New York, New York, R3 Corda is an ‘enterprise blockchain software firm’, which was launched in 2015. The company describes their platform as offering the ability to record, manage, and execute financial agreements in an efficient manner.

CEO, David E. Rutter, currently oversees company operations.

In Other News

With an expected launch date rapidly approaching, Archax has caught our attention on multiple occasions. As recently as 2 days ago, we were reporting on a new partnership with HighCastle. The following articles demonstrate a few of the more recent developments announced by Archax.

HighCastle Seeks Increased Liquidity through Archax

Unbound Tech to Offer Custodial Solutions for Archax Exchange

Globacap to Integrate Services with Digital Exchange Archax

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Exchanges

HighCastle Seeks Increased Liquidity through Archax

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HighCastle Seeks Increased Liquidity through Archax

Partnering for Liquidity

Earlier today, Archax and HighCastle announced a newly established partnership. Between the two companies, they offer services entailing the trading of digital securities, blockchain based registrar, onboarding platforms, and more.

The pairing of companies indicate that this move was undertaken in an attempt to provide high levels of liquidity for digital securities issued through PrimeNet.

Commentary

Upon announcing their partnership, representatives from each, HighCastle and Archax, took the time to comment. The following is what each had to say on the matter.

Philip Millar, Executive Director of HighCastle, stated,

“At HighCastle we provide companies and funds with a full technical and legal framework for compliant digital offering, issuance, distribution and transfers of securities on a distributed ledger and the opportunity to maintain a blockchain-based share register. By integrating with the Archax exchange, HighCastle will provide our issuers and their shareholders with the additional channel of trading and liquidity.”

Graham Rodford, CEO of Archax, stated,

“The tokenisation of all asset classes globally will not only facilitate bringing liquidity to currently illiquid and hard to trade assets, but ultimately will disrupt all traditional financial markets too. Blockchain brings huge benefits in terms of the improved efficiencies and the difference it will make to the post-trade process will be truly transformational. HighCastle, with its focus on the issuance, distribution and management of digital securities, is perfectly placed to bring the benefits of blockchain to SME firms and funds, and we look forward to working with them as this exciting tokenisation ecosystem gathers momentum.”

Speaking with Graham

We were recently fortunate to have had the opportunity to complete an exclusive interview with Archax CEO, Graham Rodford. In this conversation we learn about, not only Archax, but digital securities overall.

Interview Series – Graham Rodford, CEO of Archax

Archax

Founded in 2018, Archax maintains headquarters in London, England. The team at Archax has been ramping up operations as they prepare for an expected launch of their digital securities exchange in late 2019.

CEO, Graham Rodford, currently oversees company operations.

HighCastle

Founded in 2016, Highcastle maintains headquarters in London, England. In the time since their conception, HighCastle has developed a variety of specialized services, meant to facilitate digital securities.

CEO, Philip Millar, currently oversees company operations.

In Other News

With Archax being one of the more anticipated digital securities exchanges, it should come as no surprise that we have covered them various times here at securities.io. The following are a few articles taking a closer look at Archax, and a few of their other established partnerships.

Archax – A Bridge to the Digital Economy

ClearBank Chosen by Archax to Provide Various Services

Unbound Tech to Offer Custodial Solutions for Archax Exchange

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