This week, the popular token issuance platform, Securitize received approval from the SEC to operate under the coveted transfer agent status. This status allows the firm to now register securities trades. While the company already took such actions via its blockchain protocol, it now operates in this capacity under the SEC blessings. These developments place Securitize in an exclusive class of regulated tokenized securities platforms operating in the US.
The move makes Securitize the first official registered transfer agent in the country. The firm now operates a full token issuance ecosystem under SEC approval. Currently, the company issues, manages, and trades tokenized securities on its Alternate Trading Systems (ATS) platform.
Preparations Pay Off
Securitize took around 6-months meeting with SEC officials prior to filing for the status. The meetings focused on how Securitize’s smart contracts operate. Importantly, the firm wanted to be sure that the SEC had a full grasp of its proprietary technology, and how it incorporates into Securitize’s overall company infrastructure.
While the preparations for the filings took almost half a year, the efforts weren’t in vain. The firm received approval as a transfer agent in just ten days after its official filing. Discussing the developments, the CEO of Securitize, Carlos Domingo described the milestone as an important step towards showing investors the space is now regulated.
Domingo also took a moment to explain how the new status will benefit a host of other types of investors. In particular, Domingo pointed out the SEC’s recent approvals of Reg A+ token issuers. These blockchain investors will require the assistance of a transfer agent such as Securitize to finalize transactions.
There are some major advantages gained through the integration of a blockchain-based transfer agent system. For one, the costs are reduced significantly. For example, a traditional transfer agent can charge around $150 per transaction. Securitize plans to eliminate these charges altogether.
Securitize will remove these charges, but there will still be fees for management, dividend, shareholder votes, and interest payments. These payments help the firm to continue development on its groundbreaking platform
Securitize on the Rise
Securitize continues to expand its capabilities. To date, the firm has hosted eleven official token issuances. These issuances have a combined value of over $200 million. Notably, close to half of these tokens currently trade on secondary markets via the companies ATS.
Secondary trading is an important concern for the growing tokenized securities markets. A lack of secondary trading platforms left liquidity concerns. In response, many firms started development on in-house secondary trading platforms. Today, investors have a host of regulated options to consider.
Securitize Gets Official
Now, Securities has the positioning to expand its lead in the marketplace. This latest SEC approval showcases how the regulatory body continues to warm up to the concept of blockchain-based crowdfunding. You can expect to see a host of other token issuance platforms seek similar approval in the coming weeks in a bid to stay competitive in this ever-expanding market. For now, Securitize remains the only platform to hold this status.