SEC Approves Securitize To Record Transactions Via Blockchain
A technology provider for the issuance of blockchain tokens, Securitize, has officially been registered as a transfer agent with the U.S. Securities and Exchange administration (SEC).
According to Securitize, this initiative will increase the rate of adoption. Securitize announced on Wednesday that the registration will enable them to be the official keeper of records regarding the transfer of ownership in the securities industry. The start-up based in San Francisco says that the initiative is tactical, even though blockchain is commonly used to track the payment transfers.
“We can increase the amount of securities issued on the blockchain and give comfort to people that this is a regulated space,” said the co-founder and CEO of Securitize, Carlos Domingo. “The SEC has also started approving other types of exempted securities like Reg A+ and down the road those people will need transfer agents.”
Furthermore, the firm is going to record the transactions for free, which usually costs almost $150 for every transfer in regular, SEC-registered securities. Even so, Securitize will still charge a fee for managing the corporate and security actions, like interest and dividend payments, redemptions and share buybacks, and shareholder votes.
The SEC, after submitting an official application, took 10 days to approve. On the other hand, Securitize took almost six months to make the regulator understand the concept of the company’s smart contracts system and how it’d record the transactions, according to Domingo.
Securitize is the first ever transfer agent registered in the SEC with active issuers of securities, an efficient blockchain-based protocol, and integrations (such as OpenFinance Network, Sharespost and tZero) which enable digital securities to trade on the SEC-registered Alternative Trading Systems (ASTs).
$200 million issued
Securitize also recently reported the issuance of its eleventh digital security, which runs on the platform under its protocol. The total amount of these securities added up to $200 million, out of which, five of them trade on an SEC-registered and regulated ASTs.
The company raised an amount of $15 million in two funding rounds. Out of its 43 users, 11 have already issued securities on the public Ethereum blockchain network. Securitize also previously collaborated with Tezos but does not have any users on that chain so far.
Securitize claims to be a one-stop-shop for servicing tokens with its advisory network, Securitize Ready Program, which was introduced in April. It takes help from OpenFinance and the Coinbase Custody to get support with management, compliance as well as issuance.
Back in May 2019, Securitize used an open-sourced code for operating its in-house protocol.