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San Francisco-based startup Securitize has closed a $12.75 million Series A round led by Blockchain Capital, with notable participation from Coinbase Ventures and Ripple’s Xpring Fund.
Securitize is a company that assists other firms with tokenizing assets and traditional securities.
The funding round will help Securitize prepare for its planned launch of a Digital Security Offering (DSO) next year. According to the statement, the company believes that decentralized ledgers have the ability to bring instant transactions and transparency to the securities market.
Furthermore, Securitize also believes it is the most market-ready compliance platform for primary issuance and lifecycle management of digital securities. This is because it has worked on projects such as 22x, SPiCE VC, and Augmate.
CEO and co-founder Carlos Domingo said, that with the new funding, the company also wants to work on their investor relations, increasing liquidity, promoting compliance, and keeping up with their capital.
“Not only will they provide support for Securitize as we continue to execute at the highest level of our industry, but they will also be instrumental as we prepare to tokenize Securitize for our Digital Securities Offering.”
He added that the opportunity is not just to work with blockchain companies:
“These are first movers, but the big opportunity is in digitizing private and public shares […] 2019 will be the year that you see 10-15 exchanges trading securities in a legal way.”
There is a number of high profile companies within the cryptocurrency space that already have invested in Securitize. The startup itself raised $12.75 million in a Series A funding round led by San Francisco-based VC firm Blockchain Capital. Coinbase Ventures, Ripple, NXTP, and Global Brain Corporation have also invested.
Brian Armstrong, CEO of Coinbase, had admitted that the exchange was looking to be a de facto marketplace for buying and trading crypto securities.
The emergence of Securitize may help realize the dream of tokenizing shares with blockchain to provide more transparency, liquidity, and efficiency. Securitize will be in charge of developing tokens and regulatory compliance in a process called “Digital Security Offering.” Cryptocurrency exchanges, namely Coinbase, will still have a role as trading platforms.
Blockchain Capital’s co-founder and managing partner, Brad Stephens, who led the $12.75 million strategic funding round for the digital securities sstartup, will also join Securitize’s Board of Directors.
Stephens noted in the press release that “Securitize’s real-time compliance solution solved a critical need for our BCAP security token,” which a token based on the Ethereum (ETH) blockchain and launched in April 2017 through an Initial Coin Offering (ICO).
The press release claims that the digital securities market is worth over $7 trillion annually. Other “strategic investors” in Securitize include Donna Redel, the World Economic Forum’s former Managing Director and blockchain professor, and John Pfeffer, formerly a partner at global investment firm KKR.
Due to their inclusion during the funding round, the co-founder and managing partner of Blockchain Capital, Brad Stephens, will be a part of the board of directors for Securitize. Other participants in the funding round included Coinbase Ventures, Global Brain, XPring from Ripple, OK Blockchain Capital and NXTP.
So far, there are multiple digital securities that the company has been issuing, like 22x, SPiCE VC, Augmate, and the BCAP security token (from Blockchain Capital). Some of the company’s digital securities have already been entered on both the AirSwap and the OpenFinance networks, maintaining compliance with regulations.
In the time of writing, from Coinbase came the news that they are losing its policy head at a time when communication between Washington and the digital money sector may never be more important.
Michael Lempres, who was named the firm’s policy officer in September after serving more than a year as its legal chief, is leaving to take on a new role at Andreessen Horowitz, according to a statement from the closely held exchange. The venture capital firm was an early investor in Coinbase.