Watch out tZERO and INX — A New Player Is In Town

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Hello and happy Tuesday! It’s hard to believe we are already in February. While January started slow, it closed out the month with some significant announcements in the security token space. Between new listings, acquisitions, and an approved exchange, things are looking up for the rest of 2022. But even more, a recent announcement out of New York City may prove industry-changing.

The battle of alternative trading systems (ATS) has long been between tZERO vs. INX Limited. Both have gone their own route in development, as tZERO has spent resources on internal development. In contrast, INX has been in the process of acquiring other companies in the industry. While we have seen many headlines about announcements, many have been skeptical, arguing that there is lots of talk but not much action.

The Winklevoss twins, founders of Gemini.

Well, this war of attrition just took a turn as the Winklevoss twins have decided to enter the space. Founders of Gemini Trust Company, LLC, these two have spent the better part of the past decade building a cryptocurrency exchange and custodian for users to buy, sell, and transfer a vast array of offered coins. Their growth has been strong and consistent, becoming a household name in a very short time.

A new chapter seems to be commencing as MASSIVE news recently broke from the Gemini team.

Gemini Galactic Markets, a subsidiary of Gemini Trust Company, received approval from FINRA to operate a broker-dealer registered with the SEC.

Let’s break this down.

Because Gemini is now an official FINRA member, they can legally operate an alternative trading system (ATS).

The team said that “[a]s the digital asset industry continues to grow, we believe blockchain infrastructure will change the way companies raise money in capital markets, and the ability to provide a regulated venue for the buying and selling of digital assets that are securities will be an important part of the blockchain ecosystem.

This is a big deal.

A really big deal.

If Gemini pursues this avenue with their war chest of cash, there is no telling the ground they can make up in a short while. The security token market is growing exponentially, and a significant player like Gemini could be the key to mass adoption. They possess the tools necessary to overcome some of the current shortfalls, such as lack of volume and liquidity.

Coinbase went a similar route in June 2018 but never pursued the avenue seriously. Will it be forever remembered that Gemini was the first major exchange to leap security tokens, catapulting them to the top spot worldwide?

Those questions will be answered in time, and I cannot wait to cover it all! _________________________________________________________________

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.