Circle’s SeedInvest Receives FINRA License, Eyeing Tokenized Securities
SeedInvest, an equity fundraising platform that was acquired by U.S.-based Circle, is licensed to offer its services as an alternative trading system (ATS).
In a press release published on Friday, SeedInvest and Circle confirmed that the former had received regulatory approval from the Financial Industry Regulatory Authority (FINRA), licensing it to offer secondary trading services for private equities.
As noted, SeedInvest is targeting its users with an offer that allows them to trade equities initially offered on the firm’s primary markets platform. the offering will include the company’s shares once the initial investment is done.
Circle also announced that SeedInvest is the first platform for equity crowdfunding that FINRA has approved to offer secondary trading services.
No tokenization for now
Though granted a license, the private equities tradable on the crowdfunding startup’s platform will not be tokenized.
Also, SeedInvest customers will access secondary trading services for equities, but these will only be those offered within the startup’s existing business. What this means is that users will be able to trade traditional securities as the company moves towards providing tokenized securities.
Tokenizing securities was Circle’s aim when the company first moved to acquire SeedInvest, the CEO of Circle Jeremy Allaire revealed in March.
He noted at the time that the future of securities would be in crypto securities, with the asset class becoming a must-have for most businesses. For the moment, it is not immediately known when the platform would move to add tokenized securities.
Creating ways to generate and share value
According to the blog post, the main mission being championed by Circle is to make it easy for people and businesses around the world to generate and share value. To achieve this goal, the company wants to develop various ways through which entities can generate funds online.
Having a new ATS appears to be part of the bigger picture, with Circle stating on Friday that the aim is to give both accredited and unaccredited investors an equal chance to take part in novel fundraising initiatives.
The last few years have seen exponential growth in the number of experiments that target private capital and secondary liquidity. Central to these efforts is blockchain technology, with digital assets key to creating new markets.
In the end, the global capital markets will benefit from an established, “internet-based capital markets” through which any given company can raise capital. Also to benefit will be investors who will invest in well-funded companies.
Per the blog post, both SeedInvest and Circle are eyeing more projects as they work with regulators to offer innovative financial products and services.
Circle CEO Allaire said that the industry still had much to do, especially with regard to improving the regulatory and technical environment around the tokenization industry.
He added that FINRA, for instance, needed to work on aspects like custody, clearance, and settlement among others. Regulators would also need to revisit “decade-old policies” that were clearly not established on the premise of working with digital assets.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.