Ripple and Coinbase invest in Securitize, a security token startup

Ripple and Coinbase come together for a new project…

by Manoj Sharma for CNR

The San Francisco-based startup, Securitize, that helps firms to tokenise their securities and assets, has managed to secure $12.75 million in funding. Blockchain Capital led the series A round with participation from Xpring Fund and Coinbase Ventures. The latter two names are important, too. They’re Ripple’s and Coinbase’s investment arms.

As per the report, the start-up aims to tokenise the $7 trillion securities industry, which Securitize calls a Digital Security Offering (DSO).

The company intends to use the funds to build an engineering team and to expand operations across the world, including Asia Pacific and Latin America.

The founder and CEO of Securitize, Carlos Domingo, believes that moving securities on the blockchain will bring transparency and will facilitate instant transactions and settlements. He commented as part of the announcement that “blockchain just happens to be a better way to deal with securities. The big opportunity is in digitising private and public shares.”

To tokenise their securities, Securitize has worked with 22x, Augmate and SPice VC (Domingo’s VC firm). The start-up intends to focus on its tokenisation framework instead of building its own trading platform. However, Securitize may soon partner with several exchanges on top of that.

Since Coinbase and Ripple deal with aspects of U.S. securities laws, this investment from both firms seems to be strategic in nature. Especially at a point when the SEC in the States has been clamping down on less scrupulous projects that have fallen foul of its laws.