- The team claims the initiative is a first-of-its-kind exchange in Europe to list traditional financial assets on the blockchain via security tokens.
- ICO-generated altcoins categorised as securities will also be traded on the platform
- Firms will now be able to seamlessly tokenise their equities and get it traded on the platform without getting subpoenaed by regulators
Lykke (LKK) a Swiss-based cryptocurrency exchange that allows clients to trade both fiat currencies and cryptocurrencies, has partnered with Nxchange, a Netherlands-based firm that claims to help companies to raise funds directly within their communities, to launch a regulated tokenised securities exchange, reported Finance Magnates on October 5.
Equities Onto The Blockchain
Per sources close to the development, Lykke (LKK) distributed ledger technology (DLT) project and digital assets trading platform has allied with Nxchange, an Amsterdam-based firm that makes it easy for firms to issue and trade traditional financial assets, to develop a regulated securities exchange.
The partnership will see both teams combining strengths to create what they described as a first-of-its-kind platform in Europe to host traditional financial assets on the blockchain network by converting them into security tokens.
At the same time, the team has made it clear that altcoins generated through initial coin offerings (ICO) and classified as security tokens, will be supported and traded on the platform.
With Nxchange’s wealth of experience in regulatory compliance and client due diligence, coupled with Lykke’s DLT technical know-how, both firms plan to establish a highly functional and regulatory compliant platform that will allow firms in the traditional finance industry to tokenise their equities and issue them on the blockchain without incurring the wrath of regulators.
A New Lifeline For Security Tokens?
At a time when several financial regulators like ESMA and the US SEC, have stated categorically that bitcoin (BTC) and Ether (ETH) are the only non-security cryptocurrencies, as such all other tokens must come under its purview, the Lykke-Nxchange project appears to be a forward-thinking maneuver, as both firms have all it takes to make it work.
Importantly, Nxchange has been facilitating direct securities trading between companies and investors for a couple of years now and the firm has even established solid partnerships with highly reputed firms in the banking and blockchain ecosystems.
In February 2018, Nxchange helped ABN AMRO Clearing Bank to develop a blockchain-based alternative escrow account to bolster transparency.
Commenting on the latest partnership with Lykke, Marleen Evertsz, CEO and founder of Nxchange reiterated that:
“The time has come for a more modern form of capital market transactions: efficient, real-time, 24/7, transparent, and supported by regulatory compliant procedures that assure maximum security.”