Decentralized Securities Depository, dba Openfinance Network, filed a Form D with the US Securities and Exchange Commission (SEC). The filing, dated November 22nd 2019, shows that Openfinance Network has raised almost $9 million, and plans to raise up to $50 million.
Security Token Platform Openfinance Network’s Form D Filing Explained
Openfinance Network has filed a Form D Rule 506(c) with the SEC. According to the document, the security token platform has raised a total of $8.6 million to date, from 19 investors. Per the filing, a total of $50 million could be raised.
The developing platform aims to facilitate the compliant secondary market trading of security tokens. Openfinance Network wants to leverage the benefits of blockchain technology to bring new levels of liquidity to both traditional and non-traditional assets.
The firm has an Alternative Trading System (ATS) license and therefore has a strong grip on regulatory compliance — a crucial aspect of securities. Openfinance Network also operates Sageworks Capital, its wholly-owned broker-dealer.
Juan Hernandez serves as the company’s CEO. He believes the SEC’s Reg A+ exemption will open the doors to the much anticipated benefits that tokenization is forecasted to bring to securities.
Openfinance Network has developed a number of partnerships with leading firms in the security token space. These include Securitize, Harbor, and Polymath.
How Openfinance Network Aims to Make Security Tokens Mainstream
As a security token platform that aims to serve both individual and institutional investors, Openfinance Network is trying to enable the compliant secondary market trading of security tokens. Some envision tokenization as capable of transforming the world’s existing capital markets industry.
Through the Initial Coin Offering (ICO), the world witnessed the benefits of raising capital with blockchain technology. With the ICO, numerous advantages became readily accessible: fractional ownership, democratized financial access, added liquidity, easier investment and asset management, and the reduction of costly middlemen.
Yet the ICO curtailed many of the regulatory requirements that come along with raising capital. Regulated securities offerings, for example, have established laws that companies must follow for the sake of investor protection. That’s where the Security Token Offering (STO) comes into play.
The STO is different from the ICO insofar as the STO declares itself a securities offering. By nature, it is then forced to abide by its jurisdiction appropriate laws and regulations — otherwise it simply wouldn’t constitute an STO.
Compliant secondary market trading platforms are a critical component in security tokens actualizing their potential. Global access to security token markets available 24/7/365 is just one aspect that Openfinance Network is currently building.
Their not alone, either. Other companies — including Overstock.com subsidiary tZERO — are also building similar infrastructure. While both supply side and demand side interest continue to grow for security tokens, the infrastructure to facilitate the implementation and trading of security tokens also needs to be built. That’s precisely what companies like Openfinance Network and tZERO are working on.
What do you think about Openfinance Network raising nearly $9 million and looking to raise up to $50 million? Will the platform become a leading security token exchange? We want to know what you think in the comments section below.
Image courtesy of Openfinance Network.