Blockchain-based securities firm Securitize has acquired Pacific Stock Transfer, a company that manages the account balances of investors and certificates of security ownership. The financial terms of the deal weren't disclosed.

This latest acquisition by Securitize, which raised $48 million in a funding round last June, makes the firm a top 10 U.S. stock transfer agent, serving 1.2 million investor accounts and 3,000 clients, according to a press release.

Securitize has had a long relationship with Pacific Stock Transfer, which will continue to operate under its current brand. The services Pacific Stock Transfer now offers will continue to be provided by the same team, the companies said.

The Securitize deal is another step in equities markets moving away from a paper-based past to a blockchain-based future. In this case, it’s about digitizing the whole legally complicated and manual process of proving share ownership, paying dividends and compiling tax reporting documents.

The role of the transfer agent is a not-so-well-known part of capital markets, because most companies aren’t exposed to them until they go public. It also means most people don’t know just how inefficient these firms are, said Securitize CEO Carlos Domingo.

“I think that has created a situation where these traditional transfer agents have built monopolistic situations,” Domingo said in an interview with CoinDesk. “These traditional transfer agents are not incentivized to change because the way they make money is by inefficiencies. The issuers are not the ones suffering the problem, but the investors.”

Domingo cited the recent BuzzFeed debacle, where investors found themselves unable to sell their shares after the company’s initial public offering, as an example of transfer agent iniquity.

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Another example is where the paying of dividends inefficiently makes money for some very large transfer agents, since $5 billion in Apple dividends, for instance, earns the agent interest in a bank account where it sits for a couple weeks.

“The foundation is digitizing the securities,” Domingo said. “Because once the securities are represented on the blockchain, using wallets and tokens and managed by smart contracts, then everything else, like paying dividends very efficiently or providing liquidity, comes on top of that.”