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As of November 1st 2018, Bithumb and SeriesOne have partnered to establish a regulated security token exchange in the United States. Bithumb has experienced success with an exchange in South Korea, and with the expertise of SeriesOne, they aim to break into the quickly developing security token industry.
Bithumb is a South Korean exchange with a daily maximum transaction amount that has exceeded $5 million, and a monthly maximum amount of more than $100 million. It is precisely such volume that they wish to bring to the security token industry, through the launch of a US-based security token exchange.
In order to meet regulatory requirements, Bithumb is partnering with SeriesOne, a blockchain-based Fintech company. The firm specializes in providing strategic counsel, regulatory compliance, and fundraising infrastructure— all critical components for the establishment of a US-regulated exchange.
The launch is still subject to SEC, FINRA, and other applicable regulatory approvals. This is where SeriesOne has significant experience— they operate a platform in the US for STOs under SEC exemptions Reg CF and Reg D. They also provide services through Reg A+. Partnering with SeriesOne therefore certainly seems to be a step in the right direction.
Under the new agreement, the two enterprises will form a joint venture to create a compliant exchange for the secondary market trading of security tokens.
Back Young Heo, Bithumb’s CEO, provided comments on the unique expertise of SeriesOne:
“We are very excited about joining with SeriesOne. We are not only impressed by the mix of talent between investment banking, compliance, and technology of the SeriesOne team but also with their deep understanding of US securities regulations and how they apply to token offerings.”
SeriesOne CEO Michael Mildenberger also made remarks, highlighting his view that the new exchange will bring liquidity to the security token industry:
“We are thrilled to collaborate with a global leader in the blockchain and crypto space. I believe that our companies will be able to create a unique product to not only tokenize major assets, but that could also create liquidity through a compliant token exchange.”
The new partnership comes less than one month after tZero completed its TGE by distributing all tokens purchased during its initial offering. tZero aims to become the premier US-based security token exchange after raising $134 million during its token sale. Backed by Overstock.com CEO Patrick Byrne, many have high hopes regarding the future of the emerging security token exchange.
How competition between the two will play out is entirely unknown at this time. With the highly anticipated success of the security token industry, it is certainly possible for more than a single exchange to achieve prosperity.
The industry continues to develop at a rapid pace. Within the last week, the first security was transferred on a public blockchain. JPMorgan announced plans to tokenize gold bars. The future of security tokens is buzzing, as described by Circle CEO Jeremy Allaire:
“Crypto securities are going to become a major new category of securities that ultimately every business is going to adopt, just like every business has a website.”
The potential for successful exchanges is enormous. Which exchanges actualize that success, is set to unfold in the near future.
What do you think of the future of compliant security token exchanges in the United States? Will tZero rise to dominance, or is there enough room for others? Let us know what you think in the comments below.