Circle's SeedInvest Takes Step Toward Tokenizing Stocks With Trading License

Equity fundraising platform SeedInvest, which was recently acquired by cryptocurrency startup Circle, can now operate as an alternative trading system, the companies announced Friday.

SeedInvest and Circle said in a blog post that the Financial Industry Regulatory Authority, a self-regulatory organization that oversees broker-dealers and securities exchanges in the U.S., granted the crowdfunding startup an ATS license, letting it facilitate secondary trading of private equities - though notably, these equities cannot be tokenized.

In particular, SeedInvest will offer its users the ability to trade equities first launched on the company's primary markets platform, including startup shares after initial investment.

According to a press release, SeedInvest is the first equity crowdfunding platform to receive FINRA approval to operate a secondary trading marketplace.

While SeedInvest can facilitate secondary trading of equity, only the company's existing business - meaning traditional securities - can be traded.

A spokesperson for parent firm Circle told CoinDesk that "This is an important step forward towards realizing the vision of tokenized securities."

Circle CEO Jeremy Allaire indicated that the company was looking to tokenize securities when it first made its bid for SeedInvest public last year.

It is unclear when SeedInvest plans to add tokenized securities to the platform.

The post emphasizes that Circle hopes to help accredited and unaccredited investors alike participate in such fundraising projects.

SeedInvest and Circle will continue to work with regulators to build new products and "Innovate the financial system," the post indicated.