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Your First Captivating Topic of the Week

✅ tZERO's Shiny New License: Special Purpose Broker Dealer

Custody can be an overlooked topic, yet extremely important to the operations of a platform especially in such a regulated space AKA working with securities. On the crypto side we’ve seen how detrimental lack of clarity can be, such as when SAB121 was introduced. This left institutions at a standstill as guidelines weren’t clear, hindering innovation.

On the tokenized securities side we’ve seen a new license arise in past years, the Special Purpose Broker Dealer (SPBD), which was first awarded to Prometheum Ember Capital, essentially allowing them to custody, clear, and settle digital asset securities on behalf of their clients. Prometheum took that license and started offering custody for cryptos including Ethereum (ETH), Uniswap (UNI), and Arbitrum (ARB) ultimately treating them as securities… not a very popular choice in the web3 community.

Well there’s a new licensee and it’s none other than tZERO Digital Asset Securities! With this new SPBD license we can expect tZERO to implement changes to their operations. After this multi-year process, we can expect them to launch in Q1 2025, starting with the full digitization of their Series-A preferred equity security, the $TZROP token.

Not surprisingly, TZROP saw a significant uptick in volume (most likely as a result of this news). Their equity token usually sees volumes in the single digit thousands of dollars on individual days. This past week saw 4 consecutive days of tens of thousands, with each of them increasing the token price, resulting in a total of $169,537.71 in volume for the week.

What else can we expect as a result from this? Blockchain-native security tokens, easier movement from primary to secondary markets, maybe their own custodial solution for third parties? We’ll have to wait and see!

In the meantime we did see Prometheum announce shortly after that they are now supporting Optimism (OP) and The Graph (GRT) with plans for “traditional securities, including debt instruments, equities, ETFs, mutual funds, options, and money market funds, all issued and transferred on a blockchain” later on.

This is not financial advice.

Upcoming Webinar

Tokenization is a growing trend among TradFi folks, but why hasn't the market exploded in adoption yet? Is tokenization not as easy as it sounds?

This webinar will explore the challenges behind tokenization including compliance, regulations, legacy tools, market hours and more.

Your Second Captivating Topic of the Week

🚀 Industry Investment Activity

As summer comes to a close we’re seeing investment activity starting to pick up again in this space with 4 sizable ones to cover from this past week.

Trade finance platform, Huma Finance, is looking to expand to Stellar’s Soroban and Solana. To help with supporting these chains they’ve raised $38M but in an interesting split. Only $10M of that was for equity with the remaining $28M taken as investments into their RWA offerings. Specifically these are multi-tranche bonds in ETFs. Investors include Hashkey Capital, Distributed Global, and Stellar Development Foundation among others.

Unclear on the amount, OpenEden received investment from Binance Labs in an effort to grow RWAs in DeFi. The $TBILL issuer also has a Monetary Authority of Singapore-licensed fund management company, allowing it to operate compliantly outside the US and boasts over 100 institutional clients.

Sticking to Singapore, SDAX is looking to expand to wealth and fund management with help of their “Series B2” round of $50M. Led by Muscat Precious Metals Refining Company (MPMR), this money will also be used to grow their clientele and tap Oman to host their exchange (another platform for STM to track for you 👀).

The largest of this week’s investment activity comes from a Latin American focus with Tether investing $100M into Adecoagro, a NYSE-listed company. With Tether taking 9.8% they got this at a discount to the $1.189B market cap at the time of writing. Why would Tether want such a significant piece? Probably due to Adecoagro’s stake in Agrotoken out of Argentina. The commodities tokenization platform claims to have $70 million in tokenization deals and growing! Tether is also known to have plans to launch their own tokenization platform which our sources say should be any time now.

This is not financial advice.

Companies of the Week

Herwig’s Pick: Northern Trust

Kyle’s Pick: OpenEden

Find out why and more every Friday live at 2pm EST on LinkedIn or X/ Twitter. Past episodes available on Youtube or your favorite podcast platform! 

Reports

(NEW) RWA Securities Market Update: August 2024

We're excited to release the August 2024 edition of our RWA Securities Market Update report, which features benchmarks against the CoinDesk 20 Index (CD20)! In this month’s market report, we have meticulously tracked 632 security tokens spanning across 35 marketplaces and 10 blockchains.

Sections include:

• Key Takeaways

• Quantitative Highlights

• Asset Class Breakdown

• On-Chain Liquidity Products

• New Tokens and Announcements

State of the Tokenization Industry 2024 Report

We are very excited to publish our State of the Tokenization Industry 2024 report tomorrow with our sponsor SteelWave Digital! The Security Token Market team covers this year’s headlines and key takeaways, sorted into the following categories:

Search away, share it with a colleague, and revisit the same link for future updates!

TokenizeThis 2024: Highlights and Key Takeaways Report

The TokenizeThis 2024 Conference Highlights Report is Now Available! This was the industry’s event of the year with 500+ registered attendees, 40+ speakers, and 20 sessions & side events in Miami, FL!

There was so much to do you may have missed some panels but not to worry, the STM Team has put together a summary of it all just for you.

This is not financial or investment advice.