Security token issuance and management platform provider Harbor announced a major new iteration of its platform this week on its Medium blog. The first version of Harbor’s platform was available only as a managed service. The new version, dubbed ‘Harbor Platform 2.0,’ features a dashboard that token issuers can use to customize investor management and liquidity protocol settings.
Harbor claims that Harbor Platform 2.0 will provide fast-growing startups a way to raise funds directly from investors without having to go through intermediaries. Harbor Platform 2.0 is designed to give the security token issuer control over their cap table, including the ability to unlock liquidity to select groups of investors.
Harbor CEO Josh Stein said, “Startups want new ways to raise capital directly from investors, not only through intermediaries. They want to open up fundraising to a broader network including customers, partners, and fans who are key to their success, while still being in control of their cap table. Harbor Platform 2.0 is a turnkey solution for tokenizing private company equity that enables startups to open up fundraising directly to a broader group of investors and create innovative equity programs. Harbor allows companies to create liquidity options under controlled conditions and limit trading among trusted parties. Startups can now create more liquid, yet controlled, equity programs for key external stakeholders, not just employees.”
Harbor described several Platform 2.0 use case examples in the announcement, all based on conversations with prospective clients. The examples show how a startup can leverage its client base to attract additional funding at a lower cost than it would incur otherwise.
One example involves sports franchises looking to raise fresh capital: “Sports and esports teams can drive fan engagement by allowing them to become minority owners. Fan equity programs can include dividend-generating ownership without control provisions, and instead bundle in unique owner benefits such as private meetings with players, unique merchandise, and special ticket offers.”
Harbor Platform 2.0 features an issuer dashboard with real-time cap table details, an issuer-branded investor portal, and partially-automated investor onboarding and verification functionalities. A module dubbed ‘Trusted Parties’ manages smart contract compliance protocols to enforce rules and exemptions on security token trading and transfers.
Arisa Amano, Harbor’s chief product officer, noted that Harbor Platform 2.0 allows startups to lock up capital without locking in investors. Amano said, “Some companies and funds want to closely control their cap table, but also unlock liquidity among a closed network of investors. The ability to restrict liquidity among trusted parties is only possible with a solution like Harbor that tracks the real-world identity of buyers and sellers. As a result, companies can allow selected investors to trade in and out according to rules they set, above and beyond compliance with securities laws. A real-time issuer dashboard provides startups complete visibility and control over changes in ownership.”
Harbor Platform 2.0 includes APIs that can connect with a company’s existing infrastructure for electronic signatures, accreditation checks, and KYC/AML. Harbor partner BitGo provides the Harbor Platform 2.0 with BitGo Custody and BitGo multi-signature wallets.
Harbor is backed several Bay Area venture capital funds including Andreessen Horowitz, Craft Ventures, Founders Fund, and Pantera Capital.
SWARM Announces Swarm Capital Service Provider Platform
Swarm, a U.S. based service provider for the digital securities sector, has just announced the launch of ‘Swarm Capital’.
Swarm Capital, which is built upon the Swarm Protocol, is described as a modular platform which ‘puts the full power of digital securities on the blockchain into the hands of issuers and service firms’.
The company indicates that while Swarm Network continues to be a non-profit, Swarm Capital will look to offer more comprehensive and premium services. Swarm Capital will continue to make use of various Swarm solutions, such as their specialized SRC-20 standard, as well as their Market Access Protocol.
Swarm Capital indicates that the first product to be launched through the service will be known as ‘EarlyBird’.
Despite just being launched, this product has already seen industry adoption by multiple companies. The product works to provide its users (potential token issuers) with a look at market interest in their potential offering, before a token generation event is undertaken.
In their announcement, the Swarm team took the time to elaborate on the need for a platform such as Swam Capital. The following is what they had to say on the matter.
“As SWARM has been delivering on its promise to build an open source protocol while operating as a non-profit, we have consistently seen demand from issuers and other market participants for a service layer that would conveniently allow them to interact with the protocol layer. There has also been an obvious need for seamless integrations with other tools required within the digital security value chain. We realized that the best way to meet customers is with a dedicated entity that can demonstrate the power and flexibility of the SWARM Protocol, as well as enable its customers to use it as a foundation for building their businesses. For us, this is the natural next step to creating adoption for digital securities.”
Launched in 2018, Swarm is a U.S. based company which specializes in asset tokenization. Their efforts have resulted in the formation of various partnerships and developed technologies. To date, Swarm remains one of the few platforms to successfully assist in multiple STOs/DSOs.
Cofounders, Philipp Pieper and Timo Lehes, currently oversee company operations.
In Other News
While we have covered Swarm on various occasions, one of our most recent articles touched on the launch of Swarm 2.0. The following article looks at this, the company as a whole, and their ongoing mission.
iSTOX Exchange Completes Series A Funding
This week, the blockchain-based startup, iSTOX announced that it had completed a round of Series A funding. iSTOX seeks to bring tokenized financial assets to the Thai market in a major way. The company already has the blessing of both regulators and a vast network of financial institutions. This news demonstrates the growing demand for tokenized assets across Asia. Also, it showcases the trend of traditional financial firms entering the blockchain sector.
According to iSTOX, the company didn’t have to search for long before it found an interested investor to take part in the funding round. The company found a serious investor in one of the largest banks in the country, Kiatnakin Phatra Financial Group (KKP). In fact, the bank was the only investor needed to complete the crowdfunding campaign successfully.
The iSTOX exchange secured an undisclosed amount from this major financial institution. The funds will go towards the expansion of the platform’s investor base. Additionally, iSTOX intends to create a complete blockchain ecosystem. The platform will function as a “one-stop-shop” for businesses seeking to crowdfund their future business operations.
Discussing the platform, iSTOX Chief strategy officer Darius Liu Spoke on how the firm’s strategy adds liquidity to the market. The CSO explained how the company’s all-inclusive approach to the market is “re-intermediating the value chain.”
iSTOX Blockchain Ecosystem
The iSTOX Blockchain ecosystem enables businesses to issue tokens in a streamlined manner that is compliant with the current regulations. The company also allows businesses to tokenize a huge variety of financial instruments. Currently, you can tokenize stocks, bonds, securities, equities, and debt instruments on the platform. This strategy enables more liquidity and the creation of new markets.
The iSTOX exchange also provides token issuers and investors with a secondary trading platform. Secondary trading compliance is a major issue among security token investors. Now, these investors have an option that has the consumer protections in place that these firms are accustomed to.
Company executives want to extend their reach into the Asian security token market in the coming weeks. STOs are more popular than ever in the region. Consequently, multiple Asian governments began wooing new Blockchain firms to their shores this year. Notably, Singapore recently added a regulatory framework to help clarify investor confusion and spur further token adoption in the country.
iSTOX is a subsidiary of ICHX tech. This Singapore-based firm is a pioneer in the Thai FinTech sector. The company offers enterprise-level blockchain solutions and infrastructure. Specifically, the company specializes in smart contract integration. Notably, ICHX obtained funding from numerous traditional financial firms. Primarily, the Singapore Exchange SGX and Heliconia Capital Management were the largest contributors.
Importantly, ICHX was appointed to a group of specially chosen Blockchain businesses tasked with helping develop Singapore’s security token regulatory framework. The appointment was a huge accomplishment for the company because it was by the hand of the Monetary Authority of Singapore (MAS).
The iSTOX platform is scheduled for a fourth-quarter release date. Currently, it’s open to accredited investors only. Additionally, token issuers can submit tokens for exchange listing. You can expect to see iSTOX play a pivotal role in the Singapore crypto market moving forward.
Harbor Square Investments Approved as Broker/Dealer
A Long Road
As of September 26th, 2019, Harbor Square Investments was officially designated a broker/dealer by FINRA. This approval comes after an arduous process that took months to arrive at a conclusion.
By successfully being approved as registered broker/dealers, Harbor now gains the ability to buy and sell digital securities on behalf of both themselves and their client base.
As industry participants continue to gain a footing on what services they will offer their clients, various within the digital securities sector have the ability to act as broker/dealers within their respective regions.
This New York based company has long acted as a broker/dealer in traditional markets. In early 2019, they made a foray into digital securities, through a partnership with tZero.
One of the most well-known names in blockchain, Coinbase became a broker/dealer through the acquisition of Keystone Capital, in mid-2018. This approach was unique, as this allowed for Coinbase to gain the abilities of a broker/dealer in a short amount of time. As touched on, with regards to Harbor, applying for a new licence is a long process – Inheritance of such licensure through company acquisition has the potential to be a much more efficient route to take.
Harbor CEO, Josh Stein, spoke with news outlet, CoinDesk, commenting on the development discussed here today. The following is what he had to say on the matter.
Speaking on the length of time it took to get to this point, he stated,
“It took the regulators a long time to get a handle on the space and understand it and its implications,” Harbor CEO Josh Stein told CoinDesk. “This was very new for the SEC and FINRA, and they wanted to do it right.”
With their new designation in hand, Stein continued, commenting on the future,
“We’re going to provide the technology platform to manage the fundraising, the technology to manage investors, the technology to tokenize and enable liquidity.”
Operating out of the United States, Harbor is a tokenization platform that was founded in 2017. In the time since their launch, the company has managed to create a specialized token standard meant to serve the industry, known as ‘R-Tokens’, in addition to expanding the functionality of their platform.
Harbor Square Investments is a subsidiary of Harbor.
CEO, Josh Stein, currently oversees company operations.
We recently reported on Harbor, as they continue their efforts to serve the digital securities sector. In this recent look at the company, they caught our eye with the tokenization of $100M worth of real estate.
Short for ‘Financial Industry Regulatory Authority’, FINRA, is a regulatory body, given their power by Congress. They are tasked with ensuring compliance among broker/dealers serving U.S. based investors.
CEO, Robert W. Cook, currently oversees the organization’s operations.
In Other News
In recent months, we have seen various companies issue new licencing and designations. This has allowed for various industry participants to expand the services they offer their clients, in a regulatory compliant manner. The following articles highlight one such expansion, along with a look at the various titles held by companies like Harbor.