Blockchain platform for trading securities OTC moves forward with SEC approval

A Delaware institution is seeking registration with the United States Securities and Exchange Commission (SEC) to transportation retired over-the-counter (OTC) banal trading on-chain. 

BlackStar Enterprise Group has been processing the level since 2018 and spent astir 2 years successful connection with the regulator, answering dozens of questions and comments from examiners. Recently, the institution has taken the adjacent measurement successful providing a elaborate program to the SEC Trading and Market part astir however its platforms volition beryllium operated.

BlackStar CEO Joseph Kurczodyna told Cointelegraph that helium sought the SEC’s support to physique the platform’s demo successful 2018. “We person proved that U.S. registered securities tin beryllium traded digitally connected a blockchain, that the process is compliant with broker dealers’ back-office and SEC rules," commented the elder executive.

The level volition let trading OTC securities wrong the existing regulated brokerage ecosystem from the Financial Industry Regulatory Authority (FINRA) and SEC, the institution said successful its filings. As stated successful the document:

“For example, customers volition proceed to usage brokerage accounts and broker-dealers and the transportation cause volition proceed to support the shareholder records. [...] All custodial duties are intended to stay the aforesaid due to the fact that the level volition walk encrypted lawsuit accusation to bargain oregon merchantability orders to the due parties."

According to Investopedia, OTC refers to the process of trading securities via a broker-dealer network, alternatively than done a centralized speech specified arsenic the New York Stock Exchange (NYSE).

BlackStar’s level is built connected a backstage blockchain and powered by Amazon Quantum Ledger Database. Kurczodyna said it would stay successful the investigating signifier until licensed to a broker-dealer, clearing steadfast oregon Alternative Trading System (ATS).

Upon approval, some the SEC and FINRA volition go Certificate Holders successful the blockchain, with afloat entree to transactions. Tokens, crypto assets and abbreviated selling transactions volition not beryllium supported connected the platform.

“From a timing standpoint, we consciousness this is an breathtaking clip for BlackStar. Our projected integer trading level [...] could perchance assistance resoluteness aggregate existing trading issues, including concerns related to fraud successful the U.S. fiscal markets,” claims Kurczodyna, who believes the level volition summation transparency and mitigate risks of investing successful OTC stocks.

A akin improvement is taking spot successful Germany, wherever the authorities wants to usage blockchain exertion to powerfulness banal trading. A recently introduced authorities targets the superior markets’ digitalization done the issuance of physics securities connected a blockchain, aiming to marque the banal markets much accessible to startups and tiny businesses.

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