The world’s largest cryptocurrency exchange by traded volume, Binance, led a funding round for AngelList-backed investment platform Republic on July 1, 2018. The platform intends to develop and introduce a native security token.
Building a Global Market
As per a press release, Republic aims to attract institutional investors for its tokenized security platform that hopes to build an ecosystem “where investing in entrepreneurship, both traditional and crypto-enabled,” is the de facto method of raising funds.
The round was led by NGC ECO Fund and Binance Lab, the investment arm of the cryptocurrency exchange. Other participants included East Chain Co, Oyster Ventures, and FBG Capital.
Republic places legal compliance, fair access, and equitable partnerships for cryptocurrency companies from extrapolating the blockchain and digital asset sector from being a localized market to a “globally-interconnected” industry.
Kendrick Nguyen, CEO of Republic, stated:
“Underlying our goal of becoming the marketplace for private investing is our mission to promote broad, diverse participation in all forms of entrepreneurship. The global crypto fever has moved the needle forward almost overnight, but it has also introduced new regulatory and business complexities.”
Security Tokens on the Rise
The San Francisco-based Republic introduced token sales in late 2017 and provided Crypto, so that both non-accredited and accredited investors had an opportunity to invest in early-stage technology startups.
As seen on their website, Republic has successfully facilitated millions of dollars in fundraising for a variety of companies, such as enterprise 3D printer R3 Printing, smart contract-based prediction market Witnet, and healthcare provider CNS Pharma.
After the investment, Republic’s tokenization strategy will work towards incentivizing and engaging all participants on its platform, in addition to launching a Republic token.
The token is touted to “carry functional uses as well as economic rights,” and Republic further aims to tokenize all companies on their platform to enhance their transferability and liquidity.
Ella Zhang, head of Binance Labs, commented on the development:
“Republic brings new investment opportunities for retail investors to participate in well-curated startups. The Binance Labs team is working towards the freedom of value-exchange, and Republic’s democratization of access to startup investing aligns with our values.”
The Rise of Security Tokens
The advent of security tokens is primed to start as investors and authorities alike popularize a decade-old question: What are digital tokens backed by? While a host of companies are working towards tokenizing available shares, the efforts have thus far been fraught with controversy.
In July 2018, Blackmoon offered the token-equivalent of smartphone maker Xiaomi’s IPO, calling the activity a success. However, the company has since denied any connections to a digital equivalent of its shares.
In May 2018, Swarm Technologies claimed to offer tokens backed by shares of Coinbase, Ripple, and Robinhood. All three companies quickly withdrew their name from the development, with Coinbase reportedly lodging a cease-and-desist order against Swarm.