FTX Is Entering the Security Token Space?

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Hello and happy Tuesday! Can you believe we are already 8% through the year? Time flies when there’s so much innovation going on. Emerging markets, especially blockchain-based businesses, are incentivized to build behind closed doors. Many were surprised last week when Gemini Galactic Markets, a subsidiary of Gemini Trust Company, received approval from FINRA to operate a broker-dealer registered with the SEC. Because Gemini is now an official FINRA member, they can legally operate an alternative trading system (ATS).

Entering the security token space is a no-brainer for crypto exchanges, given their infrastructure and the prominent role that security tokens will soon play.

That is why the news that FTX raised $400 million in a Series C funding round, giving the exchange a $32 billion evaluation, fascinates me so much.

Sam Bankman-Fried (SBF), founder and CEO, is never one to shy away from taking bold risks. Between buying the rights to the arena that the Miami Heat play in for $135 million, acquiring countless exchanges, or setting up a $2 billion venture firm, execution is at the forefront of the 29-year-old’s mind.

I can only help but wonder what is going on in the background at FTX regarding security tokens. With a trading market cap over $3.7 billion and another several hundred billion in the pipeline, undoubtedly expanding into this space would make a lot of sense.

Applying for or acquiring an ATS would be the first step into this field. FTX already has the infrastructure, experience, and audience to seamlessly onboard millions of potential users. This would immediately catapult the former crypto exchange to a security token leader.

Flush with cash, innovating beyond most’s expectations, and refusing to stick to the status quo, FTX has never been one to play it safe. Similar to how they listed tokenized stocks, a type of derivative that tracks the performance of an underlying stock, pursuing new opportunities is a top priority for the company. It only makes sense that we will see them entering the security token space.

After securing key partners, will FTX be a premier place to trade security tokens? Will Gemini and FTX begin a war on a new front? These questions, and many more, will be answered in time — I’ll be here to cover it all!

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Thank you for reading this edition of Token Tuesday! If you have any questions or feedback, please reach out to [email protected]

See you next week! 👋

Written and published by Samuel J. Sachs. Follow me on Twitter.

Everything in this report is for informational purposes. Nothing in this report should be taken as financial advice or as an inducement to purchase or sell any security. Nothing in this market report should be used as legal advice. Always do your own research before making any decisions regarding financial transactions of securities.