From Beta to Live
In a long awaited announcement, OpenFinance Network has indicated that their platform has gone live. In doing so, OFN becomes the first platform to facilitate the trading of digital securities within the United States.
Until this point, the project had been in beta – meaning it was a nearly finished product, being offered to only select users for the purpose of hashing out any remaining ‘bugs’.
By going live, OFN essentially heralds a new age of liquidity, efficiency and opportunity for investors. Secondary markets, representing a massive investor base, now allow for greater exposure of tokens distributed via STOs. It is this ability to openly trade that equates to high levels of liquidity.
This platform is what many competitors are marching towards. OpenFinance Network is the first one to achieve the goal.
Those that are interested in taking part in STOs, but are not accredited investors, should take solace. Use of the platform is open to both accredited, and non-accredited investors. This applies to both United States residents, as well as those outside of the nation’s borders.
Founded in 2017, OpenFinance Network is based out of Chicago, Illinois. Since launch, OFN has established themselves as an industry leader. Their specialties lay in their established framework for security token services.
Speaking on the live launch of OFN was company CEO, Juan Hernandez. He stated, “2018 is said to be the year of security tokens, but, for us, this is only the beginning…We are committed to supporting all levels of investors in participating in this burgeoning alternative asset ecosystem. As we continue to partner with more security token assets, we are able to offer people more opportunities for wealth generation.”
With their sights set on industry advancement, the sector should look very different during 2019. Already boasting a plethora of tokens for investors to trade, expect for OFN to continue this growth.
One of the more notable tokens to be traded on the platform is that of Blockchain Capital (BCAP). This was one of the industry’s first STOs to ever have been completed. This is just one example of some of the projects that can be found on OFN.
Read more on BCAP here.
Various industry leaders have commented on the progress made by OpenFinance Network. Here is what a few of them had to say:
CEO of Securitize, Carlos Domingo, says, “Security tokens, or digital securities, will only begin to make a meaningful contribution to the financial landscape when compliant trading can take place on a wide scale. We are proud to have partnered with OpenFinance Network to make this a reality.”
Co-Founder of Blockchain Capital, Brad Stephens, says “As creators of the world’s first security token, the BCAP, we are encouraged by the growth of the security token market and related infrastructure. We are excited to be partnering with OpenFinance Network that is enabling liquidity of security tokens in a regulatorily compliant way.”
ABACA Partners with CoolBitx on CEZEX
This week saw more exciting developments in the Asian security token sector. CEZEX, Asia’s first licensed security token exchange, announced a strategic partnership with longtime blockchain hardware developers CoolBitx. The partnership strengthens CEZEX’s already pivotal role in the Asian market and demonstrates a desire for more security token integration in the region.
CEZEX is a Philippines-based security token exchange. The platform is unique in that it is the first licensed security token exchange in Asia. The platform is based in the Philippines Cagayan Economic Zone Authority and is the brainchild of the Asian Blockchain and Crypto Association (ABACA).
News of the CEZEX exchange first hit the market in January of this year when the platform’s backers announced plans to expand their operation into Hong Kong by 2020. This move places CEZEX in the ideal location for a security tokens exchange in the region. Hong Kong continues to see growth in their crypto sector ever since China banned most crypto-related activities back in August 2017.
CoolBitx is an industry leader in the region. The firm made headlines way back in 2015 when it became the first company to introduce a Bluetooth cryptocurrency wallet. Since then, CoolBitx continued to expand its services. Today, the company offers a host of blockchain related products and services.
For their part, CoolBitx will handle all security token custodial services for CEZEX. Security tokens differ from utility tokens in that they don’t permit anonymous transactions. Instead, security tokens must follow the strict securities laws already covering the market. CoolBitx will be responsible for verifying and completing tokenized securities exchange transactions. Their responsibilities extend after issuance and into secondary market transactions.
Secondary Market Concerns
While primary regulations are often integrated directly into a security token’s smart contract, secondary market compliance is a hot button issue in the market. Secondary market concerns hit a fevered pitch this week when the DTCC released their fair market practices paper which outlines how to deal with security tokens on the secondary market.
The intervention of the DTCC marks a turning point in tokenized securities. The DTCC handles securities exchanges for the traditional markets. The group handles quadrillions in securities exchanges yearly and their influence in the market can’t be understated. DTCC’s paper argued that security tokens need secondary compliance in order to maintain fair market practices currently in place. This is an argument echoed by many in the industry
ABACA Asian Blockchain and Crypto Association
ABACA continues to see expansion with this latest partnership. The group now includes multiple blockchain industry leaders. One of the group’s most prominent new members is the Taiwan-based Formosa Financial. Speaking on the group’s unprecedented growth, ABACA’s director, Mel Songco explained how the group creates a more “compliant and secure business environment.”
Security Tokens in Asia
Asia has always generated momentum in the cryptomarket. This latest maneuver demonstrates a desire by traditional investment firms to enter the blockchain space. You can expect to see more firms join ABACA in the coming months as the digital economic revolution continues.
Archax Gears up for Launch with Quod Financial
Today, a forth coming digital securities exchange, Archax, has announced a partnership with Quod Financial. This pairing will see Archax turn to Quod Financial for various services, ranging from smart-order routing, trade automation, to order management and more.
These services are made available through integration with Quod Financial’s ‘Adaptive Execution Platform’. Capabilities made possible through this platform will allow for Archax to effectively deliver their product to institutional investors this coming year. If they achieve this goal, Archax will become – with the help of Quod Financial – one of the first offerings of its type seen in the industry.
In their press release, representatives from both companies took the time to elaborate on the development.
“Archax will be the first venue to bring digital asset trading into the mainstream financial community. Existing crypto venues have been primarily retail driven, and so it has been incredibly challenging for our buy-side and sell-side clients to include any form of blockchain-based instruments in their portfolios as they have lacked a regulated and stable venue. Given the rigorous selection process, we are proud to have been selected for this market-changing project to bring both digital assets as well as our data-driven execution intelligence to a wider audience.”
“We wanted to find a best-of-breed partner with an established and proven trading platform used by both the buy-side and sell-side. And one that was ready to handle the complexities of digital assets. Quod’s open, scalable and robust platform fitted the bill perfectly and we are happy to be able to offer it to clients as one of the ways of accessing our exchange…A key decision when evaluating technology providers from the traditional world was to find a platform that could be fully customised to support the new and developing security token space. Quod’s design, using industry standard architecture, allows easier customisation when required. That, coupled with their experience of handling high throughput trading for many tier-one banks and an array of other established regulated clients, made them an ideal partner.”
Quod Financial is an established company specializing in capital markets. Since their launch in 2004, the company has expanded from London to maintaining offices in New York, Paris, Hong Kong, and Dubai.
Company operations are overseen by CEO, Ali Pichvai.
This London based company was founded in 2018 by Graham Rodford, Matthew Pollard, and Andrew Flatt. The company is aiming for a 2019 launch of their platform, designed to act as an exchange for digital securities.
In Other News
Archax, in particular, has found themselves in our news feed various times in past months. They have had an impressive development period, resulting in investments from SPiCE VC among others. Check out the articles below to learn a little more about Archax.
seriesOne to Utilize ST-20 Standard by Polymath
Various companies have made announcements detailing intended usage of token standards lately. As the development of various crowdfunding platforms in the digital securities sector continues, the time has come for many to choose what they feel is the most promising standard. With this in mind, seriesOne has just announced that they have partnered with Polymath.
This partnership will see seriesOne utilize the ST-20 token standard to issue and manage digital securities. The ST-20 protocol is based off of the Ethereum blockchain, and will allow for seriesOne to maintain compliance with global regulations governing the industry.
The Future is ST-20
For seriesOne, it was a simple choice to settle on ST-20. This token standard was one of the first to be developed specifically with digital securities in mind. As such, Polymath has had more time than most to develop, hone, and market their offering. This effort has seen the standard adopted by various companies, with seriesOne being the most recent.
In their press release, the CEOs of each company took the time to express their thoughts on the announced partnership.
“Investors around the world trust Polymath, which was fundamental to our decision to work together…We are confident that working with the Polymath team using the ST-20 protocol will enhance the process of raising capital on our platform.”
“Polymath is proud to work with innovative partners like seriesOne, who has fulfilled a specific demand for a turnkey financing portal for any fundraising process…We are thrilled to be the chosen technology standard for the seriesOne platform, and we look forward to demonstrating yet again how industry can work together to set a standard for creating and managing a successful Security Token Offering (STO).”
seriesOne is a crowdfunding platform, which specializes in the issuance, distribution, and management of digital securities. Through their platform, issuers are able to effectively, and efficiently, host security token offerings. The company is based out of Miami, and was founded in 2013.
Polymath is a Canadian company, which maintains headquarters in Toronto. The company was established in 2017, and is spearheaded by CEO, Kevin North.
To date, Polymath and their token standards remain one of the most adopted solutions in the young world of digital securities. Their own utility token is available for trading on various industry leading cryptocurrency exchanges such as Poloniex and Bittrex.
In Other News
Each of these companies discussed here today have found their way into our headlines in recent months. For a look at what they have been up to recently, make sure to check out the few articles listed below!
- The Application of Broker-Dealer and Exchange Regulations to Secondary Markets – Thought Leaders March 21, 2019
- ABACA Partners with CoolBitx on CEZEX March 21, 2019
- Equity Tokens vs Security Tokens March 20, 2019
- Archax Gears up for Launch with Quod Financial March 20, 2019
- seriesOne to Utilize ST-20 Standard by Polymath March 20, 2019