A Harsh Blow
No one is trading their tokenized securities on OpenFinance Network (OFN); Well, not nearly enough to cover the cost of hosting such assets. As a result of this limited activity, OFN has found themselves between a rock and a hard place.
With OFN garnering funds for operational costs through trading fees, it shouldn’t be surprising to hear that they need a new approach. This new approach is simple – token issuers must sign new contracts, and, essentially, pay a listing fee for their tokens.
If this doesn’t happen, OFN indicates that on May 21st, all tokenized securities will be de-listed from their platform. At this point, OFN will no doubt suffer from an identity crisis, as acting as a trading platform for such assets is their whole shtick.
Here’s to hoping that issuers step up to the plate!
OpenFinance – A Trendsetter
News of the potential delisting of such assets from OFN is, obviously, disheartening. To date, OFN has been seen as a trendsetter, with regards to digital securities.
It was only just over a year ago, that we reported on the launch of their trading platform. At the time, it was the first of its kind, and represented great hope for the future of the sector. While it may continue down this path, the current issue at hand is, most definitely, a serious hiccup along the way.
To ask for a listing-fee from issuers of supported assets, is not really a stretch at all. While OFN may have offered free listings to date, as they attempted to ramp up adoption of their platform, this is not necessarily normal practice.
Exchanges, small and large, typically charge initial listing fees, in addition to recurring yearly fees, ie. The NYSE, and Nasdaq
The following chart highlights where OFN has generated their income, to date. While it is unclear if there will be any change to these trading fees, they will soon be accompanied by a new listing fee, as well.
In their statement, provided to clientele, OFN makes it clear that operational costs are at the heart of this issue. They stated,
“We have asked the issuers currently listed on the platform to renew their listing agreements and cover a portion of our costs, including through annual listing fees, as are common in large, public markets, where issuers pay exchanges for listing services.”
Founded in 2017, OpenFinance Network maintains headquarters in Chicago, Illinois. Above all, OFN acts as a registered trading platform for both, tokenized and non-tokenized, securities.
CEO, Juan M. Hernandez, currently oversees company operations.