Bitfinex Securities — paving the way for the next class of capital markets?
Bitfinex Securities is the tokenized securities platform of Bitfinex. Securities are fungible and tradable financial products that are used to raise funds in both public and private markets. There are primarily three types of securities: equity — which provides ownership rights to holders; debt — essentially loans repaid with periodic payments; and hybrids — which combine aspects of debt and equity. Security Token Offerings (STOs) are a means to foster global financial inclusion, which is in line with Bitfinex’s vision to accelerate a transition to a more open and fair world. STOs offer the opportunity for all investors to access high-quality investment opportunities, where in traditional markets access is not so equal.
“The survivors in this bear market will be the ones who didn’t spend all their money on massive type sponsorships — Bitfinex has always been a lean company and the financial industry is in some big trouble,” says Bitfinex CTO, Paolo Ardoino.
Ignoring friction points like accredited and foreign investment restrictions, many investors are essentially walled off from participation in private equity, fixed income, overseas public equity, and alternative assets. Issuers usually face similar challenges. The STO market offers issuers the opportunity to tap into a new non-traditional investor pool, that is today worth over $1 trillion, and very comfortable with investing in digital assets.
“We think our securities platform is perfectly positioned to serve not only smaller markers but emerging markets too,” adds Bitfinex CTO, Paolo Ardoino.
Tokenized securities represent an opportunity beyond lower issuing costs and broader market access, though. Tokenized securities also allow investors greater flexibility and control over their assets. Technologies like the Liquid Network, allow Bitfinex Securities to strike a balance between regulatory obligations and freedom of use by investors.
The tokenization of existing securities and Security Token Offerings (STOs) are quickly moving from experimental, novel and niche to credible, proven, and mainstream.
Tokenisation offers benefits which include:
- Instant trade settlement;
- Blockchain-verified withdrawals and deposits;
- The ability to manage your own wallet with your own keys are carried over for tokenised securities offerings.
Security tokens could possibly represent the next generation of capital markets. Today, you can issue a security token at a quarter of the cost of an IPO, and in much smaller size, with even $5million or less raises possible. In addition, while IPO preparation can take the best part of a year, STOs can come to market in just months, and we expect that to come down significantly over time.
“We will adhere to all regulatory frameworks for the securities as a technology company we will not be doing the marketing — if someone gets hurt someone goes to jail,” notes Paolo.
As a regulated investment exchange in the AIFC Fintech Lab which was modelled after the Dubai International Financial Center and operates on English common law making its frameworks more familiar to institutional and foreign investors. The Bitfinex Securities platform aims to be a hub for technology startups, funds, innovative token offerings, as well as traditional companies, who are seeking funding and liquidity in the digital token economy.
Bitfinex Securities allows firms to enable their tokenised securities to be traded either through our capital raising platform or by listing directly on the exchange. By tokenising offerings like equity and debt securities, companies can enable their offerings to be transacted on exchanges and between wallets with the same or similar technology used for cryptocurrencies. Investors and issuers will be able to increase efficiency (speed, transparency and resilience) and reduce costs associated with raising capital and trading investment products on traditional markets.
Bitfinex Securities can be used by two types of operators namely:
- Members and
Members are usually individuals or an entity that has applied for and been granted membership to Bitfinex Securities.
While an Issuer means the company which offers any Admitted Security through the Admission to Trading Platform.
Through the removal of inefficiencies from traditional debt issuers tokenized debt is compliant, fast and transferable. The debt issuance access provided is 24/7 to organizations that have historically been underserved through current capital markets.Bitfinex Securities aims to create an inclusive environment with its world class technology.
Bitfinex Securities aims at respecting all applicable regulatory requirements, including strong KYC and AML checks, as required by our supervisory authority, the Astana Financial Services Authority, (210540900068).
Bitfinex Securities issued its debut offering earlier this year, with the launch of the Blockstream Mining Note, which raised Eur 6.75M, and provides accredited investors exposure to bitcoin mining, functioning as a tokenized version of Blockstream’s institutional focused bitcoin mining business. It was the first exchange to list the Blockstream Mining Note.
By matching the technology of the digital asset industry with clearly defined issuer obligations, investor protection, and regulatory oversight, STOs could offer investors and issuers a faster, cheaper, and lower friction way to invest, raise capital, and trade.