This week, the Ontario Securities Fee (OSC) greenlighted the tokenization startup TokenGX to begin development on a secondary trading platform for tokenized securities. The new platform, dubbed FreedomX, will allow Canadian investors to leverage blockchain technology in the local financial sector. As such, the news represents a major milestone for the entire North American market.
FreedomX will be one of the first secondary trading platforms for Canadian-based digital assets. Consequently, it will play a major role in the digitization of the Canadian financial sector moving forward. According to company documentation, the platform will offer a full site of functionality to users. These functionalities include the ability to buy and sell digital assets directly from the order book interface. Additionally, developers plan to provide a variety of useful tracking and data analyzation tools to improve the overall UX.
Importantly, FreedomX incorporates advanced smart contract technology to ensure full compliance with Canadian securities regulations. These self encoded restrictions will allow developers to gradually introduce the exchange to users based on their geolocation. At first, developers intend to restrict access to only Ontario residents and an exclusive group of invited whitelisted investors who already met all financial and KYC requirements.
In the coming weeks, developers intend to open the platform to all accredited investors. Lastly, the general public will gain access tot he exchange, but with a few restrictions. Specifically, retail buyers’ orders can’t exceed $2,500. This investment cap is meant to prevent untrained investors from incurring huge losses.
TokenGX developers envision FreedomX utilizing a stablecoin named the settlement steadiness token. This Canadian greenback-tethered token would function as the main form of settlement on the platform. Additionally, another token labeled FNDR tokens will be traded on the secondary platform. These token will represent each of the ten Ontario-based issuers which have already issued tokens with TokenGX.
Notably, both tokens are ERC compliant and reside on the Ethereum blockchain. This decision to utilize an Etehreum-based protocol provides investors with the most interoperability available because Ethereum is the most popular security token protocol. This interoperability may one day allow TokenGX wallet users to gain functionality as the platform continues to expand.
Gathering Secondary Market Data
As part of the approval process, TokenGX secured a, as of yet unnamed, approved digital custodian. Now, thanks to the OSC approval. TokenGX will begin gathering critical data on secondary-market buying and selling. Importantly, it was back in October 2019 that TokenGX first obtained approval for the FreedomX concept.
TokenGX Inc is registered as an exempt market dealer in British Columbia, Alberta, Ontario, and Quebec. The firm entered the market with the goal to provide advisory, technology implementation and brokerage services for clients in connection with digital-asset offerings by way of blockchain-based technologies. Importantly, TokenGX Inc does business as “TokenFunder” when it sells exempt market securities over the internet through the TokenFunder.com platforms.
It’s important to mention that Tokenfunder and TokenGX both have strong networks within the blockchain community. For example, the firms just completed Inventive Destruction Lab’s (CDL’s) 10-month blockchain accelerator program. Now the group is ready to take the knowledge gained and utilize it to strengthen its position in the market moving forward.