The first securities token trading platform has been approved by Ontario Securities commission (OSC). TokenGX had earlier applied to the regulator for a license to facilitate secondary market trading for security token and was granted a surprising approval to host a platform that would serve residents of Ontario.
The project dubbed FreedomX will run until April 17, 2021 and it is considered a pilot program that would determine if the regulator would approve for extension and expansion of similar secondary trading market platforms. Meanwhile, participation required KYC/AML compliance for users.
Unlike what is obtainable in other secondary markets for trading of security tokens, the FreedomX platform is open to retail and institutional investors. Retail investors are limited to investment of $2,500 which many consider a substantial amount.
Speaking on the development, Laura Pratt, co-founder of TokenGX said:
“As part of the current Creative Destruction Lab blockchain cohort, our FreedomX platform will define the next generation of trading in Canada and unlock enormous value in the private markets. We envision a world where all assets will be tokenized and tradeable.”
Alan Wunsche, another co-founder of TokenGX said:
“TokenFunder’s leading edge security token issuance platform has a full investor onboarding and investing experience for retail and accredited investors. With today’s announcement, TokenFunder will now power the FreedomX secondary trading marketplace. With digital shares recorded on a public blockchain, we will not only dramatically reduce the cost of capital for Issuers compared to traditional platforms, but also provide liquidity through the secondary trading marketplace, which also includes critical ongoing management disclosures and investor relations services for our Issuers.”
The news may signal a change in policy direction of regulators in the country, most of which have maintained tough stance against security tokens. Canada rarely makes news with respect to security token even though there are indications that Bank of Canada has shown strong interest in the blockchain technology.