Nasdaq Enters Crypto Market Through Security Tokens, Leads $20 Million Funding in Symbiont
As of late January 2019, Symbiont has announced a successful funding round totaling $20 million— and led by Nasdaq. Separately, Symbiont and Nasdaq have partnered to bring compliant security tokens to the United States, which highlights just one way Nasdaq is quickly entering the realm of blockchain-based assets.
Nasdaq’s Involvement with Symbiont Explained
The past year has resulted in one of the worst bear markets the cryptocurrency industry has seen to date.
With increased regulatory enforcement throughout 2018, the ICO-phase seems to have disappeared just as fast as it came.
Yet as quickly as it came and went, security tokens have slid in to take its place. That’s what current market atmospherics seem to suggest anyway, especially with Nasdaq’s increasing involvement in the blockchain space.
Symbiot, a smart securities blockchain startup, recently announced a $20 million Series B funding round, led by Nasdaq Ventures.
The news is not very surprising when the existing relationship between the two comes to light. Symbiont and Nasdaq are already working together to develop a new platform which is dedicated to offering regulated, compliant security tokens in the United States.
Yet Symbiont isn’t Nasdaq’s sole gateway into the blockchain realm.
The DX.Exchange— which is powered by Nasdaq— has purportedly tokenized existing shares of tech giants such as Facebook, Apple, and Tesla. They have created a tokenized form of ownership, where such ownership can be purchased and transferred with the benefits of distributed ledger technology. Meanwhile, the actual shares remain in a secured account owned by DX.Exchange.
In addition, Nasdaq is looking to offer a Bitcoin futures contract in early 2019 which is distinct from the two which currently exist for digital assets. Those two are through Cboe and CME Group. Cboe currently uses one source to base its price of Bitcoin, while CME Group uses four. Nasdaq however, has plans to use 50 different sources from around the globe.
How Security Tokens Could Not Only Replace the ICO, but the IPO
Many have speculated on the reasoning for the ICOs degradation (or degeneration). The increased regulatory enforcement from federal regulatory bodies and even state regulatory bodies certainly didn’t help.
In 2018, more than $36 million was returned to harmed investors, most of which came from ICOs or infamous ‘utility’ tokens.
Security tokens circumvent all legal ambiguity by openly classifying themselves as securities. In such a situation, all parties involved must abide by the existing securities laws.
The situation has resulted in numerous ERC-20 compatible security token standards as featuring transparent and algorithmically enforced compliance.
To date, fractional ownership of fine art, investment funds, real estate, and equity have been tokenized.
The benefits of distributed ledger technology used in the creation and transfer of asset ownership far exceed their traditional counterpart. As a result, many claim that Security Token Offerings (STOs) will not merely go on to replace the ICO, but the financially burdensome Initial Public Offering (IPO).
What do you think of Nasdaq’s increased activity with digital assets? Will the entrance of institutional giants eventually lead to the STO replacing the IPO? We want to know what you think in the comments section below.
Image courtesy of CNBC.