As of June 5th 2019, Coinbase Custody announced that it is now accepting withdrawals and deposits from BCAP. The news entails the first Securitize-issued security token to be supported by Coinbase Custody.
Coinbase Custody Now Supporting BCAP – Explained
BCAP, which stands for Blockchain Capital, was one of the first security tokens to ever be established.
Its original funding round took place in 2017, when it sold out in a little over 30 minutes. The Security Token Offering (STO) utilized the SEC’s Reg D 506c and Reg S exemptions.
BCAP is essentially a fund of investments in companies throughout the cryptocurrency and blockchain sectors.
At the time of writing, BCAP has a portfolio comprised of 51 companies and 6 exits to date. Some of the portfolio’s existing companies include Blockstack, Coinlist, and even Coinbase.
Now, Coinbase has taken one further step into the security token industry by tweeting,
“Coinbase Custody now supports deposits and withdrawals for $BCAP.”
BCAP was issued through the Securitize DS Protocol.
Securitize CEO Carlos Domingo responded to the news by tweeting,
“Great news for the ecosystem, @coinbase now supporting securities issued by @Securitize DS protocol starting with @blockchaincap BCAP token.”
Jamie Finn, Securitize Co-Founder and President, also tweeted,
“A much needed piece of the Digital Securities Puzzle is coming together. Very proud to have@Securitize DS tokens supported by@CoinbaseCustody.”
Why Security Tokens are Seeing More Support Than Ever Before
The Security Token Offering (STO) differs from the Initial Coin Offering (ICO) in many ways. Perhaps the most important way is regulatory compliance.
SEC Chairman Jay Clayton has publicly described how nearly every ICO he has seen, is representative of a securities offering. Yet hardly any ICOs— if any at all— have complied with the SEC’s existing laws and regulations.
This is where security tokens enter the picture. In explicitly declaring themselves securities, security tokens abide by the SEC’s existing requirements, and therefore capture the regulatory compliance which is absent in ICOs.
As a result, companies are leaving the ICO behind and turning to the STO as a viable alternative.
What do you think of Coinbase Custody supporting BCAP? What does this say about the current state of security token adoption? We’d like to know what you think in the comments section below.
Image courtesy of Coinbase Custody.