The team behind the Bittrex exchange has teamed up with Rialto Trading to launch a digital securities trading platform, according to a press release on August 23.
Existing Deep Waters
With the regulatory limbo surrounding much of Blockchain and the cryptosphere, most projects distance themselves from the notion that their tokens should be considered securities.
Many exchanges also require independent legal review confirming that a coin is not a security before they agree to a listing, a cost often separate from the listing fee to the exchange itself. And the reason is simple – there is a legal framework already in place for handling the trade of securities. One which makes it awful difficult for exchanges with anonymous users to operate in many jurisdictions, including the US.
Realistically, however, a lot of projects in crypto will likely come to be classified as securities by regulators sooner or later.
There is a strong case to be made that any coins or tokens distributed through an ICO should be considered a security. Investors are, after all, investing in a project with the hopes of rich rewards when the project delivers, and the line between a security token and a utility token can be pretty blurry when the token is explained one way and used the other.
With a dearth of compliance ready exchanges in the market, however, Bittrex has teamed up with Rialto, a company with extensive experience working with the securities industry and developer of their own Alternative Trading System, along with a host of tools for the fixed income industry.
Combine that with Bittrex’s experience in crypto and digital security and the two companies hope to develop a secure and inviting Dollar to Securities exchange with full compliance with US financial regulations. This will very likely preclude any anonymous trading on the exchange, which will cause a section of the crypto community to scoff at the ambitious project.
Others will see it as an opportunity to trade on a platform that may very well end up looking a lot more appealing to experienced traders and investor from other sections of the financial industry. Mainstream adoption of crypto does after all depend, at least in great part, on becoming more integrated into the finance industry.
Institutional and Accredited Investors, corporations and US-registered brokers can already register their interest in creating an account for the upcoming exchange on Rialto Trading’s website.