Circle-backed startup SeedInvest has received a FINRA approval. Its Alternative Trading System (ATS) will now be able to offer ICO tokens sold as securities.
Boston-based blockchain startup SeedInvest has received FINRA approval and can now offer and sell security tokens. Providing secondary market liquidity, its Alternative Trading System (ATS) will be able to legally host security tokens.
SeedInvest has received significant capital from Circle and Goldman Sachs, creating a crowdfunding platform through blockchain technology. The FINRA approval will place SeedInvest, and Circle as well, under the oversight of the Financial Industry Regulatory Authority (FINRA) and the US Securities and Exchange Commission (SEC).
The news will allow SeedInvest to conduct all its operations in a regulatory-compliant manner. This positions the startup on a firmer regulatory footing as it seeks to expand into blockchain-based securities going forward.
The news is significant given that such approval is difficult to come by in the United States for security tokens. Only a select few blockchain companies and security token issuers have successfully made themselves legally-complaint to host such tokens. Although the regulatory landscape remains difficult to navigate, there is some indication that regulators are coming around. Legislation is currently in Congress to separate tokenized securities from existing security law.
Circle purchased SeedInvest in late 2018 to gain a competitive edge in the tokenized securities market. The endeavor is funded partly by Goldman Sachs. In February of 2018, Circle also acquired the cryptocurrency exchange Poloniex in a surprise acquisition.
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Image courtesy of SeedInvest.