San Francisco-based SPiCE VC announced on Thursday it would launch Securitize, a new platform to facilitate token ICOs. The firm hopes the new medium will help new token creators to stay in compliance with the relevant national laws.
"It’s inevitable that security tokens will transform equity just as Bitcoin has transformed currency, because they afford the owner a direct, liquid economic interest and the expedited delivery of proceeds," SPiCE VC Co-Founder and Managing Partner Carlos Domingo said in a press release. "Every type of ownership can be tokenized, which is a massive multi-trillion dollar addressable market."
SPiCE sees ICOs as major investment opportunities, but hints at the weaknesses of many offerings. Their site claims that the real revolution of cryptocurrencies will come when they are backed by real assets. In this case, they want to replace paper certificates with "tokenized securities."
SPiCE developed Securitize in-house as part of the VC's own ICO, as well as to help their clients' companies issue their own tokens. Some of those clients are the 22X Fund, Lottery.com, Kairos.com, and CryptoOracle. The platform will also streamline compliance with US regulations and over time.
SPiCE is offering tokens in its own holdings and is promising revenues to token holders, as well as the ability to trade the tokens immediately upon receiving them.
Ashwini Anbujaran, the founder of the 22X portfolio company OpenUp, claimed that the "22X Fund is the first crypto offering of its kind - a security token backed by equity in 30 companies, all alumni of the 500 Startups Seed Accelerator program."
Compliance will be big in 2018
Securitize offers a service to branded ICO websites to help them keep track of the offering, provide live updates via a blog, and track website metrics. Clients that are managing ICOs can choose to manage the entire campaign themselves or farm it out to the Securitize team.
The platform includes managing relevant legal documents, investor accreditation (depending on the country), and the creation of third-party crypto wallets. The press release boasts a "decentralized liquidity option based on the Bancor Network " and KYC (know-your-customer)/AML (anti-money-laundering) approvals. There are also plans to provide basic legal guidance for different jurisdictions.
Compliance will be a major this year as countries grapple with how to regulate the cryptocurrency industry. In December, the Securities and Exchange Commission (SEC) issued a statement explaining tokens may constitute securities under U.S. law.
Recent Chinese and South Korean moves are shaking markets, while countries like Israel and Australia clarify tax policy.
See more security tokens in our Security Token Offering list