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Anchorage to Custody Digital Securities for Prometheum’s Retail Trading Platform

The custodian’s bank charter allows it to hold digital assets for broker-dealers and their clients, said Anchorage CEO Nathan McCauley.

Mar 31, 2021 at 1:00 p.m. UTC
Updated Sep 14, 2021 at 12:34 p.m. UTC

A subsidiary of blockchain company Prometheum has tapped digital asset bank Anchorage to be the custodian for an alternative trading system (ATS) for digital securities that the company expects to be open to the public later this year.

According to Prometheum CEO Aaron Kaplan, the ATS application is still pending at the Financial Industry Regulatory Authority (FINRA), but the company has built a system that allows brokerage firms and clearing firms to speak to each other easily in an effort to entice Wall Street companies to use a platform with which they’re familiar.

“It’s a Nasdaq on the blockchain,” Kaplan told CoinDesk in an interview. 

Adding more ATS platforms for the digital security market will give issuers more liquidity for their tokens, said Anchorage CEO Nathan McCauley. Last month, security token platform Tokensoft announced it would allow its issuers to trade their digital securities on tZERO, which uses Prime Trust as its custodian.

Other ATS providers for digital securities include OpenFinance and the Public Private Execution Network. Security token firm Securitize applied for both a broker-dealer license and an ATS in October.

“The big advantage of securities tokens is public ledgers,” McCauley said. “The transparency is unprecedented in traditional securities markets.”

During its charting process, Anchorage got specific approval from the Office of the Comptroller of the Currency (OCC) to custody security tokens on behalf of broker-dealers, McCauley added. Anchorage plans to offer cash loans with security tokens acting as collateral through an affiliate.

CORRECTED (March 21, 20:22 UTC): The ATS application is pending at FINRA, not the SEC.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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