Venture capital firm SPiCE VC said on Monday its security token launched in March will trade on the OpenFinance Network, the first such asset to list on a U.S. regulated trading platform.
Security tokens are digital currencies backed by a tradable asset such as real estate or equity and are subject to federal security regulations. These tokens represent a right to those underlying assets.
They have gained prominence this year as more companies, taking advantage of the move to blockchain or distributed ledgers, sought to create tokens that comply with regulations.
"Investors in SPiCE VC are not locked in for 10-15 years. They invest in tokens," Tal Elyashiv, co-founder and managing partner of SPiCE VC told Reuters in an interview late last week.
"Think about them as digital contracts. They're securities and they give token holders economic rights to the performance of the portfolio. So when there's an exit, the net proceeds get distributed to all token holders in a pro rata way," he added.
SPiCE VC, registered in Singapore, raised about $15 million in its security token offering in March of this year. The funds raised were used to invest in a range of technology companies - they have about seven companies in their portfolio and are continuing to invest in more.
Ami Ben David, co-founder and managing partner of SPiCE VC, said non-U.S. investors will be able to trade their SPiCE tokens on Monday. U.S. accredited investors, on the other hand, will have to wait until March of next year to trade their tokens, since there is a 12-month restriction for those holders.
Earlier this year, the cryptocurrency market transitioned into a new, more mature phase with security tokens. Despite more than 100 companies entering this space, the lack of a live regulated trading platform harmed the promise of liquidity and delayed further deployments.
The OpenFinance Network, which has facilitated trading of alternative assets on its platform since 2014, has provided that venue for trading of security tokens. SPiCE VC officials said more security tokens will be listed on the platform.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chris Reese) ((gertrude.chavez@thomsonreuters.com; 646-223-6322; Reuters Messaging: rm://gertrude.chavez.reuters.com@reuters.net))
