TokenSoft, a blockchain company specializing in security token issuances, announced on Thursday it had acquired a stake in an SEC-regulated firm, now renamed as TokenSoft Global Markets, in a move that will clear the path for it to operate as a registered broker-dealer.
The acquisition puts the company on a firmer regulatory footing with the Securities and Exchange Commission and positions it to offer a broader range of blockchain-based securities. It also allows the platform to perform all operations in a regulatory compliant manner.
TokenSoft, which also simultaneously announced that it could acquire 100 percent of the broker dealer, did not disclose the purchase price.
The move allows TokenSoft to utilize the acquired firm’s capabilities to create a turn-key solution for the initial issuance and secondary trading of ICOs as unregistered private securities. TokenSoft and TokenSoft Global Markets, which will operate separately, would be able to manage the entire lifecycle of blockchain-based digital assets, including origination, issuance, exchange, settlement, and redemption.
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“TokenSoft Global Markets will expand the range of services available to TokenSoft clients, including referrals to exchanges or brokers, custody solutions, or private placements services. The investment positions us to provide clients with true end-to-end support for the launch and management of their digital assets, driven by the same passion for security and compliance that is core to TokenSoft,” the company said.
Response to US Regulators
TokenSoft is not alone in its pursuit, as many US companies are seeking to tap the rapidly emerging asset class of digital tokens which has raised more than $20 billion so far this year, per Coindesk’s ICO tracker.
Furthermore, the move is being seen as a response to US regulators classifying certain digital tokens as securities and therefore coming under the SEC’s supervision. Wall Street’s top watchdog says that any entity that wants to become an ATS needs to register with the SEC as a broker-dealer and become a member of a self-regulating organization, such as the FINRA.
Earlier in June, Coinbase announced that it is moving forward with a plan to acquire licensure that would allow it to begin offering blockchain-based securities and participate in the ICO market. The company has also acquired the broker-dealer Keystone Capital Corp, which is based in California.