Circle’s SeedInvest is the first equity crowdfunding platform in the U.S. to receive FINRA approval.
The Financial Industry Regulatory Authority (FINRA) has approved the status of a crowdfunding platform, SeedInvest, which was recently acquired by cryptocurrency startup Circle, as Alternative Trading System (ATS). It will now operate as a secondary market of securities, allowing investors to trade their share in startups.
“The announcement marks an industry milestone as SeedInvest is the first equity crowdfunding platform in the U.S. to receive FINRA approval permitting secondary trading of securities through an ATS, in addition to capital raises in the primary markets,” says the official press-release.
Obtaining ATS license, according to Circle, reaffirms the commitment of working closely with regulators in developing new products that will contribute to improving the financial system and comply with rigorous regulatory standards.
While SeedInvest can facilitate only trading of traditional securities, a spokesperson for parent firm Circle told CoinDesk that “this is an important step forward towards realizing the vision of tokenized securities.”
Circle CEO Jeremy Allaire indicated that the company was looking to tokenize securities when it first made its bid for SeedInvest public last year.
Circle, a company operating crypto exchange Poloniex and issuer of USDC stablecoin along with Coinbase, announced plans to acquire SeedInvest last October and closed the deal in March after regulatory approval by FINRA.