Blockchain startup Securitize, which specializes in recording the transfers of digital assets from one owner to the next, announced today that it has become a registered transfer agent with the U.S. Securities and Exchange Commission (SEC).
The move allows Securitize to act as an official keeper of records for all digital securities registered with the SEC, becoming the first enterprise with a working blockchain network to do so, according to the company’s statement.
The SEC has been coming down hard on companies that fail or refuse to properly register their securities with the Commission. Over the last two years, the Commission has issued a growing number of lawsuits and fines against ICO-funded crypto startups who failed to register their token offerings as securities.
Securitize wants to make cases like these become a thing of the past.
“Securitize has consistently led the market through our execution and commitment to delivering on the promise of compliant digital securities on the blockchain,” Securitize CEO and co-founder Carlos Domingo explained in a statement. “Becoming a registered transfer agent is the natural next step for Securitize as we continue to work toward making all securities digital.”
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This will also allow digital securities powered by Securitize to be traded on platforms already registered with the agency, such as Sharespost, tZERO and Open Finance Network. The idea is to build an immutable and auditable network that documents all security trades, thereby bringing further legitimacy to the space.
Securitize—which last year raised close to $13 million in VC funding from Coinbase, Blockchain Capital, and other firms—offers various products that aim to help blockchain companies create and distribute security tokens.
Now, as a registered transfer agent, the company intends to deliver real-time data that ensures dividends and interest are paid in a timely manner. The company can also conduct buybacks and record shareholder votes. In addition, a new tool is available through Securitize known as the transfer verification tool (TVT). The product will allow investors to perform background checks on all tokens they’re considering.
Perhaps the biggest benefit to receiving the SEC’s approval is that Securitize now becomes a hub for all token ventures seeking clarification regarding the status of their assets. Securitize will also manage the lifecycles of both unregistered and registered digital tokens on its own blockchain.
“This opens up opportunities for issuers of registered securities to tap into the digital securities market in an efficient and trusted way,” Domingo said.