Emerging cryptocurrency regulations are giving rise to an influx of incoming security token markets. On Aug. 28, OpenFinance launched a security token trading platform for retail and accredited investors.
Regulated Trading Platforms Proliferate
U.S.-based OpenFinance network (OFN) launched a regulated alternative trading system (ATS) for digital assets, according to a blog post.
Every stock, bond, currency, and commodity will become digitized (tokenized).@OpenFinanceIO just launched a regulated exchange to allow investors to trade these tokenized securities.
Wall Street is officially on notice: Begin digitizing assets or get left behind.
— Pomp 🌪 (@APompliano) August 28, 2018
The OpenFinance trading platform will allow accredited investors to trade and transfer U.S.-compliant security tokens. Retail investors without accreditation will be able to trade select tokens after a 12-month holding period.
The first tradeable token on the platform is SPiCE VC (SPX), with Science, Protos, MintHealth, Corl, Bloxroute and Property Coin being added in the near future. The firm has confirmed that other tokens eligible under a Regulation S, D, A+ or CF exemption might also be listed.
In an interview with CoinDesk, CEO Juan Hernandez said:
“[Our partners] are all security tokens that have the necessary smart contract infrastructure in place to be able to trade on our platform.”
The OFN trading platform uses a hybrid-chain model that combines off-chain data privacy and speed with the security and transparency of the Ethereum network. Through blockchain integration, OFN is able to lower transaction costs and increase the number of accessible entry points during trading.
According to Hernandez, the firm has been in contact with U.S. regulators for launch approval:
“It’s such a new space that the conversations, communications that we’ve had with regulators more often than not turn into education, where we are highlighting and detailing how our technology and the smart contracts standards allow for adherence to the rules and compliance.”
Earlier this month, OpenFinance also confirmed a strategic partnership with Huobi, one of the world’s largest cryptocurrency exchanges.
Through the agreement, both companies plan to expand their exposure to new digital asset markets and trading systems.
OFN is not the only security token exchange to meet regulations. In mid-July, Coinbase confirmed a trio of acquisitions that gave them the licenses necessary to launch a security token trading platform.
Cover Photo by Joel Filipe on Unsplash