Blockchain technology company Templum has announced earlier today that it had joined forces with its affiliated broker dealer Liquid M Capital so that they could launch a new regulated platform for token trading focused on the U.S. market.
The two companies said in a press-release that they are going to create the system that will offer both primary issuance of ICOs and the secondary trading of both registered and unregistered digital assets as securities through an Alternative Trading System (“ATS”).
“Templum’s strategic partnership with Liquid M Capital will allow it to utilize Liquid M Capital to create a turn-key solution for the initial issuance and secondary trading of ICOs as unregistered private securities. Templum’s proprietary technology and intellectual property combined with Liquid M Capital’s ATS will provide ICO investors with the first of its kind platform for the sale and secondary trading of digital tokens,” they say.
ICOs (Initial Coin Offerings) have gained heavy popularity during the last year as they’d proven to be an efficient and innovative way of raising capital for blockchain based startups and firms. Just this year ICOs have helped their launchers to raised over $2 billion to date in 2017, compared to $100 million for all of the previous year, CoinSchedule.com claims.
However, despite the growing buzz around the initial coin offerings, the ICO market has operated independently of jurisdictional securities laws until past July when the U.S. Securities and Exchange Commission (“SEC”) released a report which concluded that sale and trading DAO tokens violate the local security laws. The organization also stated that from that moment sales and offers of digital assets by “virtual” organizations in the U.S. should be subject to the requirements of the federal securities laws.
“Templum’s model is designed to build upon ICO innovation by adhering to existing regulations to add the essential element of investor protection,” said Chris Pallotta, founder and chief executive officer, Templum. “By doing so, we hope to increase widespread acceptance of ICOs that will attract more capital interest in innovative, growth-oriented companies and result in the overall growth of the global digital asset market. We believe that once our platform is fully established it will become the primary destination for transacting in digital assets worldwide.”
“We’ve long advocated for a strong digital asset ecosystem for both issuers and investors, and sought to preserve the best elements of the ICO community,” said Vince Molinari, chief executive officer, Liquid M Capital. “With the DAO report, we can reasonably conclude that most digital assets are likely to be treated as securities by U.S. regulators. Templum will meet the need for compliant ICOs and secondary trading liquidity in a single destination.”
The news about the partnership of two major blockchain companies came a week later after tZero, a subsidiary of e-commerce giant Overstock.com, unveiled a joint venture together with RenGen and Argon Group to launch an Automated Trading System (ATS) for trading tokens issued via ICOs.
The JVtZero is expected to improve liquidity, which has been a major hurdle to further development of the security token market. In July, the SEC claimed that any digital token is a new type of security and thus must comply with securities regulation.