Security Tokens Platform OpenFinance Launches Regulated Trading Venue

The ATS creates a way for companies to tokenize equity without running afoul of regulatory obligations.

OpenFinance Network (OFN), a trading exchange for tokenized securities, is launching an alternative trading system (ATS), which is a clearing and settlement platform based on the blockchain that lets companies raise capital with security tokens. It also provides a secondary market ‎liquidity for ICO tokens that are offered and sold as securities.

The venture, which will capitalize OpenFinance’s regulatory approval, aims to create a way for companies to tokenize equity and issue it on a blockchain without running afoul of regulatory obligations.

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Many US companies are seeking to tap the rapidly emerging asset class of digital tokens which has raised more than $14 billion so far this year, per Coindesk’s ICO tracker. Also making this a huge growth industry, cryptocurrencies overall currently have a current market cap of $222 billion, according to coinmarketcap.com.

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.‎

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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.

Investment from Huobi

An alternative trading system is a trading venue that is not regulated as ‎an exchange but operates by matching the buy and sell orders of its ‎subscribers.

OpenFinance already offers a platform that manages the entire lifecycle of blockchain-based digital assets, including origination, issuance, exchange, settlement, and redemption. The site claims it will enable all operations in a regulatory compliant manner. Its client roster includes banks, brokerage houses, custodians, and transfer agents serving the alternative markets.

The US-compliant startup has recently announced partnerships with a list of prominent players in the blockchain industry as it seeks to capture a portion of a huge market class that is waiting to be tokenized. Earlier this month, it received a significant investment from Huobi, one of the world’s largest cryptocurrency exchanges.

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