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Ontario Regulatory Green Lights First Security Token Startup
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The Ontario Securities Commission (OSC) is green lighting TokenGX’s request to facilitate secondary-market trading of security tokens. The platform will be released as a pilot program supporting security tokens until 2021.
The Ontario Securities Commission has approved a security token trading platform for Ontario residents only. The pilot program, called ‘FreedomX,’ will run until April 17th 2021. KYC/AML processes is required and, if successful, will expand to other areas. The company responsible for filing the request for approval was TokenGX.
Unlike most other secondary marketplaces, the new security token platform will target both retail institutional investors. Retail can only invest up to $2,500, but still a sizeable amount nonetheless.
The FreedomX platform will be powered by the Ethereum blockchain, built by a company called TokenFunder.
The news was welcomed in the security token industry and may signal a change of heart among regulators in Canada. As Laura Pratt, Co-founder of TokenGX, explains.
“As part of the current Creative Destruction Lab blockchain cohort, our FreedomX platform will define the next generation of trading in Canada and unlock enormous value in the private markets. We envision a world where all assets will be tokenized and tradeable.”
Alan Wunsche, also Co-Founder of TokenGX, echoed similar thoughts:
“TokenFunder’s leading edge security token issuance platform has a full investor onboarding and investing experience for retail and accredited investors. With today’s announcement, TokenFunder will now power the FreedomX secondary trading marketplace. With digital shares recorded on a public blockchain, we will not only dramatically reduce the cost of capital for Issuers compared to traditional platforms, but also provide liquidity through the secondary trading marketplace, which also includes critical ongoing management disclosures and investor relations services for our Issuers.”
Canada is not known for making the news in the security token world. This past April, a Canadian-based crypto-asset portfolio manager announced it would be holding an STO. The Bank of Canada has been toying with blockchain concepts, however, as part of JPMorgan’s new initiative, the Interbank Information Network (IIN).
Do you think that Canada is warming up to the idea of tokenized digital securities? Let us know your thoughts below in the comments.
Image courtesy of The Global and Mail.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
