Coinbase and Ripple Back Security Token Startup ‘Securitize’
Securitize, a San Francisco-based startup that assists companies with tokenizing assets and traditional securities, has closed a $12.75 million Series A round led by Blockchain Capital, with notable participation from Coinbase Ventures and Ripple’s Xpring Fund.
According to a statement provided to CoinDesk, the funding will be used to build out Securitize’s engineering team and expand the company’s geographic coverage from Latin America to the Asia Pacific Region and other parts of the world. The company is currently looking to hire developers for its Israel office, in addition to several regional development managers for various geographies.
CEO and founder Carlos Domingo, who formerly led the R&D division at Telefonica, hopes that by transitioning securities to decentralized ledgers, they will be more transparent and auditable. Digitization would also facilitate instantaneous security transactions and make the current 2-day settlement period unnecessary.
“Blockchain just happens to be a better way to deal with securities,” Domingo told TechCrunch. “The big opportunity is in digitizing private and public shares.”
To date, Securitize has tokenized a number of companies, including 22x, SPiCE VC (Domingo’s VC firm) and Augmate. Even its lead investor, Blockchain Capital, leveraged the Securitize protocol for its BCAP security token. The company refers to this process as a digital security offering (DSO).
The investment looks to be a strategic one for both Coinbase and Ripple, as both companies are currently dealing with aspects of US securities laws from different ends.
While Coinbase is currently pursuing US regulatory approval to list digital assets that are categorized as securities on its trading products, Ripple and its community is in a constant back and forth regarding the possible categorization of XRP as a security.
While the company has no intentions of building out a trading platform — focusing instead on the tokenization framework — the Series A will likely open the door for multiple exchange partnerships moving forward.
OK Blockchain Capital, Global Brain and NXTP also participated in the investment round. Additionally, Blockchain Capital co-founder Brad Stephens will join Securitize’s board of directors, according to CoinDesk.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.