Last August 2019, Securitize, a provider of technology for issuing blockchain tokens, has been registered as a transfer agent with the U.S. Securities and Exchange Administration (SEC), a move it says will boost adoption.
The registration means Securitize can now act as the official keeper of records about changes of ownership in securities. While that might sound redundant given that blockchains are supposed to track asset transfers, the San Francisco-based startup says it’s expedient.
“We can increase the amount of securities issued on the blockchain and give comfort to people that this is a regulated space,” said Carlos Domingo, co-founder and CEO of Securitize. “The SEC has also started approving other types of exempted securities like Reg A+ and down the road those people will need transfer agents.”
As a further enticement, the company is offering to record transfers for free, which would normally cost around $150 per transfer for regular, SEC-registered securities, Domingo said. Securitize will still charge for the management of securities and corporate actions, such as dividend and interest payments, shareholder votes and redemptions and share buybacks.
While SEC approval after its official submission took only 10 days, Securitize worked for around six months to make sure the regulator understood how the company’s smart contracts would keep a record of transfers, Domingo said. Securitize’s DS Protocol, the firm says, allows the management of secondary trading and corporate actions for digital securities. It further claims to have the “highest adoption rate in the industry,” having issued 11 digital securities already with “dozens” more on the way.
Securitize claims to be the first SEC-registered transfer agent with a working blockchain protocol, active securities issuers and integrations that allow digital securities enabled by its protocol to be traded on SEC-registered alternative trading systems (ATSs), including OpenFinance Network, tZERO and Sharespost.
The exact amount injected by SBI wasn’t disclosed but seems to correspond to a 7 figures sum.
In a statement, SBI Holdings CEO and president Yoshitaka Kitao said his company “strongly believes in the future of digital securities,” citing Securitize as one “leading player in the industry.”
The move is part of a broader shift in Domingo’s view. A few years ago, he said much of the interest around the space came primarily from those already sold on the ideas of blockchains and initial coin offerings.
Now, it seems there is more mature interest around security token offerings and similar tools, Domingo said.
“I think that the fact that [SBI is] putting their faith and investing in a company like us [is] signifying the move towards more adoption of security tokens,” he said.
Extarcts of articles from Nikhilesh De & Daniel Palmer – Source CoinDesk