Chinese exchange giant Huobi has announced[1] an investment in and partnership with the OpenFinancial Network. The OpenFinancial Network describes itself as “the first US based regulated security token trading platform.”
A security token, as opposed to a utility token, is designed to represent value of an outside source. Most commonly, it is supposed to represent ownership of a company or project, much like stocks represent ownership in companies in traditional finance.
In the United States, security tokens are generally seen as under the purview of the Security Exchange Commission (SEC). Since the SEC has strict laws on who can offer and invest in securities, that has put the US market out of reach for a lot of security ICOs. OpenFinancial Network is attempting to bridge that gap by using its contacts and experience in the industry. But more than just adding compliance to the bevvy of shady crypto ICOs, they also hope to tokenize traditional securities and enable their trade using the OpenFinancial Network blockchain.
Huobi has been[2] making inroads in the US market, launching its US based exchange HBUS earlier this year. The investment with OpenFinancial Network seems to be a move towards expanding that reach and preparing for whatever comes next.
“Huobi Eco has always been committed to providing support and solutions for Huobi to operate within the compliant requirements of every country in which we do business.” Explained Huobi’s Head of Business Development and Investment for North America, Will Wang, in a press release “This is even more important as our market matures. We are looking forward to collaborating with OpenFinance and applying blockchain technology to revolutionize the financial technology market.”
While the idea of trading securities on the blockchain has been around for years, it hasn’t come to fruition yet. While
