2 Crypto Startups Unveil Security Token Issuance and Trading Service

Two crypto startups want to streamline the process of issuing and trading security tokens by providing an all-in-one solution.

Securitize, a Coinbase-backed security token startup, is partnering with OTCXN, a blockchain infrastructure company to develop and offer a digital security offering service.

Under the arrangement announced Tuesday, the two companies will help other firms tokenize and sell securities by combining Securitize's securities compliance platform with OTCXN's custodial ledger system.

Carlos Domingo, CEO and co-founder of Securitize, told CoinDesk that his firm would create and facilitate the sale the tokens in compliance with the relevant security laws in each client's jurisdiction.

OTCXN founder and CEO Rosario Ingargiola added that Securitize would create the security tokens on the ethereum blockchain using the ERC-20 standard and handle the initial issuance.

The security tokens themselves would not be traded.

Instead, another token representing the securities would be transacted.

Custodians, such as Kingdom Trust or Prime Trust, would store the security tokens using their specific systems, which may include cold wallets.

While these digital representations may be what is traded on OTCXN's system, Domingo added that "You [still] own the security."

While OTCXN has its infrastructure solutions up and running, it has not issued any security tokens with Securitize, as the firms are still waiting on regulatory approvals in a number of jurisdictions.