Blockchain startup Templum has acquired Liquid Markets Group’s broker-dealer and alternative trading system Liquid M Capital LLC.
The regulated “tokenized asset” trading platform hopes to enable users to trade cryptocurrencies in compliance with U.S. securities regulations, notably treating digital assets as securities, the company announced in a press release today. Prior to the acquisition, Liquid M was a partner to Templum, enabling it to act as a digital exchange.
The firm also unveiled its board of advisors, which notably features former Securities and Exchange Commission Troy Parades, who served as a commissioner at the U.S. regulator between 2008 and 2013. The board also includes Jeffrey Bandman, a former FinTech advisor to Commodity Futures Trading Commission who was the architect and founding director of the agency’s LabCFTC initiative; Lightning Labs co-founder and CEO Elizabeth Stark; and David Weild IV, a former vice chairman of NASDAQ.
Liquid M is a part of both the Securities Investor Protection Corporation, a non-profit organization set up to protect customers in the event a broker-dealer fails, and the Financial Industry Regulatory Authority (FINRA), a self-regulatory group aimed to protect investors from malicious securities firms.
Liquid Markets Group chief executive Vince Molinari said in the release that combining Templum’s team with Liquid M’s existing alternative trading system (ATS) and other assets will help “position Templum to drive the evolution of this asset class.”
“We believe Templum’s platform, standardization and commitment to investor protection will make Templum the leader in facilitating the offering and secondary trading of digital assets offered as securities.”
Last October, Templum raised $2.7 million in a seed funding round, which it intended to use to launch its trading platform. At the time, the firm’s founder and CEO, Chris Pallotta, said that utilizing an ATS allows Templum to provide investors protection from possibly risky initial coin offerings.
The announcement is notable for its timing, coming just a day after U.S. Securities and Exchange Commission chairman Jay Clayton noted that no company offering an ICO had registered their tokens as securities to date. During his testimony to the U.S. Senate Committee on Banking, Housing and Urban Affairs, he stated that every ICO he had seen looked like a security offering.
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This article has been updated with additional information.