A major factor in the future success of security tokens, or in the tokenization of real world assets (where an asset is “digitized” on the blockchain), depends upon the liquidity of these crypto securities. As an investment, these are securities in the U.S. and must comply with securities laws.
Accordingly, compliant trading platforms must exist in order for secondary trading, and therefore liquidity, to exist. Alternative Trading Systems (“ATS”) are the specialized broker dealers that are licensed to make secondary markets for private securities such as security tokens.
Previously little known and esoteric “dark pools”, entrepreneurs and institutions alike are now rushing to establish and promote these highly regulated platforms. In addition, several “peer to peer” services have emerged whereby sellers and buyers can list, buy and sell securities without the need for an intermediary.
While we know of several additional platforms currently under development, following is a list of the several ATS and peer to peer exchanges that are currently in the market for the purpose of providing liquidity for security tokens.
CURRENT ALTERNATIVE TRADING SYSTEMS
Coinbase is the leading crypto exchange with over 13 million users and has raised over $525 million in venture capital to date. It purchased an ATS in mid 2018 and is finalizing regulatory approval as of November 2018.
Templum Markets LLC is a broker dealer and alternative trading system (“ATS”) registered with the SEC and FINRA, offering issuers a platform for the initial sale of their tokenized securities and both issuers and investors a centralized platform for secondary trading.