Blockchain technology is complicated enough, but ensuring its asset-based security and liquidity for serious investors is driving innovation in the very nascent market of digital currencies.

The limitations of corporate financing can be decentralized with blockchain-based security tokens, by opening the secured ledger process to more investors and providing liquidity to token holders. While working to tokenize an entire venture capital fund, the team at SPiCE VC discovered there was no clear-cut solution for deploying a security-backed blockchain, ultimately building one for themselves. As development progressed, the process garnered interest from so many that the team decided to spin off Securitize, an internationally compliant, end-to-end security token platform for others to leverage.

“We took the decision last year to basically separate the platform from the fund, and the fund becoming the first customer, and we created Securitize, which is basically an end-to-end issuance platform for security tokens,” said Carlos Domingo (pictured), founder and managing partner of SPiCE VC and founder and chairman of Securitize. 

Domingo spoke with John Furrier (@furrier), host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during the Polycon18 event in The Bahamas. They discussed how Securitize is streamlining the process of raising a security-backed token.

Streamlining token securitization

One of the primary benefits of leveraging decentralized coin offerings as a means of fundraising is attracting investors from around the world. While navigating the regulatory concerns from a wide range of investor nationality would historically pose significant legal challenges, Securitize’s platform automates the process to ensure compliance with each jurisdiction’s requirements.

“Managing all of these thousands of investors would not be possible in the traditional financial system, right? Because you have investors from many countries, with different currencies, different bank accounts, different banks, and with the smart contract and tokens you can automate the entire process,” Domingo explained. 

The platform is also taking steps to curate the companies it accepts into its program for funding to help assure investors will receive a good return. The team receives hundreds of leads applying to raise a security token, and their organization is the first step of the due diligence process for investors, according to Domingo.

“We want to make sure that people who we’re securitizing know that those are quality companies that we’ve vetted and our lawyers have checked that the company’s interesting, that the company is going to do well, not the fundraising, but later down the road,” Domingo concluded. 

Watch the complete video interview below, and be sure to check out more of SiliconANGLE’s and theCUBE’s coverage of Polycon18.

Photo: SiliconANGLE