Bithumb, Korea’s largest cryptocurrency exchange has signed a deal with a US-based fintech company to open a security token exchange.
Bithumb Plans Security Tokens Platform
South Korea-based Bithumb, one of the largest cryptocurrency exchanges in the world, is reported to have signed a deal with a US fintech firm, Series One, to launch a security token exchange in America.
The development was reported in an article published by Yonhap News Agency on their website earlier today. According to the article:
The agreement with SeriesOne calls for Bithumb to invest in and provide technical support for the establishment of the envisioned security token exchange in the world’s largest economy.
At the time of writing Bithumb is the number one exchange by trading volume according to data aggregator CoinMarketCap.
Series one is a fintech firm that leverages crowdfunding model and connects start-ups with investors through its online platform. The firm has the approval from SEC (US Securities and Exchange Commission) for crowdfunding.
What Are Security Tokens?
Security tokens are digital assets that are considered as securities and need to comply with federal laws and regulations concerning securities.
Like stocks, security tokens are tradeable financial instruments and pay dividends, share profits, pay interest or invest in commodities to generate earnings for holders.
Security tokens are different from utility tokens that are designed to access a company’s products or services in the future and are exempt from the federal laws that govern securities.
As reported by Live Bitcoin News earlier, SEC has increased its surveillance and scrutiny of firms that have launched ICOs (Initial coin offerings) to raise funds for their projects by offering token sales. Many of such projects had not obtained the required clearances from SEC.
Launch Timelines
“SeriesOne is pushing to establish a security token exchange in the United States during the first half of next year, and Bithumb will provide related technology and operate the exchange,” reported the article quoting sources.
A Bithumb official said:
SeriesOne actively sought to strike a deal with Bithumb after assessing it as the most suitable partner. Bithumb will ramp up efforts to develop into a global financial firm as the blockchain-based asset tokenization is expected to spread globally down the road.
To cater to Asian markets, Series One has established a subsidiary in South. The firm is reported to be looking to get its shares traded on the US exchange for unlisted companies this year and preparing for a listing on NASDAQ later next year.
With increased regulatory surveillance in the US, projects that intend to offer their tokens to American investors are likely to issue security tokens. The security tokens market can be expected to grow in the future, and Bithumb has taken a step to fill the need for a regulated securities exchange.
Do you think we will see more securities exchanges open in 2018? Let us know in the comments below.
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