Be prepared for regulated token trading
Today it was declared that Medici, Overstock’s subsidiary and its capital markets arm which is focused on blockchain is starting a unique ATS (alternative trading system) which will offer a platform for cryptographic tokens exchange considered as securities in the U.S.
A combined project with RenGen, which is a fintech company that is going to operate as the market creator and Argon Group, a specialist ICO capital raising investment bank, the ATS shall be regulated by the SEC as well as FINRA (Financial Industry Regulatory Authority).
This means that ATS shall provide a regulated alternative that is legally authorized to a major securities exchange like Nasdaq and New York Stock Exchange.
In this regard, the platform might be regarded as a huge advancement where the token space is concerned. In simple terms, presently, there lack any other methods that are regulatory authorized for security tokens to be traded by U.S. investors.
The Overstock.com CEO, Patrick Byrne informed CoinDesk:
‘I consider this to be a monumental happening. We are launching a different kind of capital market.’
Earlier, the start of the ATS happened after Overstock issued reports in June showing that the firm was searching for other methods to use technology initially created as a section of an organized blockchain stock market offering meant for conventional capital markets.
However, CoinDesk reported that after the resolution by SEC to group some tokens as securities, the Medici arm of Overstock acquired a product which is fully created, prepared to capitalize on a different market totally – one which is attaining worldwide force.
This might be putting it mildly, but the cryptocurrency investments market is thriving as this year it overshadowed the mark of $2 billion, states the CoinDesk ICO Tracker. This may be only a small part of what the future holds.
The general counsel and interim CEO, Emma Channing informed CoinDesk that she thinks her company’s latest ATS may experience trading worth $2 billion in the coming 12 months.
In other words, Argon anticipates the overall ICO issuance size will soon surpass $4 billion.
Apart from forming liquidity for another kind of security, Byrne stated that the latest platform shall be attractive since it shall lower the price of transactions by 80%-90% over the model currently being utilized by conventional securities exchanges.
The blockchain advantages would also facilitate clearance of trades at the period of execution, in contrast to the present three-day time delay presently experienced by investors at conventional stock exchanges, he stated.
Byrne says that lowered prices and quicker settlement times shall signify a market that is more just, with extra liquidity and extra effective cost discovery.
However, another major group experienced the effect: entrepreneurs and developers introducing token sales. In the present scenario, ICO providers are currently going through a predicament:
• They should either try to form a token which falls below the SEC’s specification of a security or
• They should meet that specification and abandon the liquidity that is a result of public trading.
However, Channing states that the latest platform declared today shall eradicate that alternative.
‘We think this is precisely what the SEC requested for in the report for DAO,’ she informed CoinDesk.
Channing continued to illustrate how, in the opinion of Argon Group, the latest platform shall permit ICO providers to form tokens that are investment products.
‘You can guarantee a return, portfolio tokens or all kinds of fascinating methods of presenting a financial return,’ she remarked.
Remarking on a similar topic, Bryne from Overstock shared the same opinion:
‘Presently, there is exactly a single (SEC approved exchange which is tokens focused) in the globe – and we are the owners.’