By Lawrence Wintermeyer
May 11, 2018
Templum, a New York-based trading technology company has attracted $10 million of funding from Japan’s SBI Group. This is big news for those of us in the crypto space – institutional crypto trading platforms are starting to emerge.
It is the beginning of the tokenization of everything that can be tokenized.
Put aside the hype of Bitcoin theater and the nascent $8 billion ICO market, the capital markets have arrived: bonds, stocks, derivatives, managed futures, property, treasury – from asset trading to asset management, from exchange to settlement, if it can be, it will be tokenized.
In February of this year Templum purchased broker-dealer and Alternative Trading System (ATS) Liquid M Capital, a regulated "tokenized asset" trading platform that enables users to trade cryptocurrencies in compliance with U.S. securities regulations, notably treating digital assets as securities.
I recently spent some time with Vincent Molinari, the CEO of Templum Markets and Co-Founder of Templum, in their new offices in lower Manhattan.
Vince is an extraordinary individual.
He is a well recognized industry leader in digital securities, technology, and regulation, a killer triumvirate of execution experience in the crypto space that most companies need a team to cover.
He is also a global leader in impact investing and in his role with the 5th Element Group, a public benefit company or “B-Corps”, launched the first-of-its-kind worldwide "Innovation Supercluster" focused on issuing social impact tokens for investors who seek a financial return that meets their Environment, Social and Governance (ESG) objectives through the United Nation’s (UN) 17 Sustainable Development Goals (SDGs).
Speaking with Vince is soul food for me. As a geek social capitalist into many of the same things, I just want to join his merry band of folks and participate in all of the cool projects he is involved with. I feel almost homesick on my flight back to London.
Q. How did you get into digital and crypto securities?
A. I’ve been licensed in the securities business for the last 30 years, and digital assets as securities represented the very clear next evolution of this domain, and the future of finance.
My partner Chris Pallotta, the CEO of Templum, and I both identified the emerging trend of smart contracts and their ability to aggregate capital and create efficient distribution of securities with investor protection, in a regulatory framework, solutions currently lacking in today’s market.
The writing is on the wall. The digitization of securities is the solution to create a whole new level of access to capital for innovators and growth companies, while creating new opportunities for investors to “wealth create”, and fundamentally change the nature of how finance becomes democratized.
Q. What is a Tokenized Asset Offering (TAO)?
A TAO is the next evolution, the “internet 3.0” of what ICOs started in the marketplace. Tokenized assets are digital assets as securities that are issued in full compliance with US securities law, and issued through a registered broker dealer, and secondarily traded on a registered alternative trading system.
TAO’s as securities could represent equity, debt, revenue share, profit participation or a distinct combination of those - creating innovative security structures. Because it is a security, it confirms for anti-money laundering (AML), know your customer (KYC) provisions and investor protection.
As TAOs are issued under US securities laws exemptions, they have a clear pathway to liquidity on specific dates when transacted on our ATS.
Q. You have spoken about Internet 3.0 and the evolution of blockchain and digital assets, what do you mean?
A. The evolution of recorded ownership has evolved from paper certificates to centralized database registries with transfer agents. It is now moving to smart contracts on distributed ledger technologies as the means of recording ownership and this is a great enabler for greater transparency, access, liquidity and exchange.
Q. Is this trend to tokenize assets only in America, or are you seeing it overseas?
A. The beauty of this is that it is a global phenomenon that can create greater visibility and access to securities that transcend national boundaries, if they are offered within compliance of local jurisdictions.
TAOs are receiving widespread attention and we seed both the demand and adoption picking up globally. The momentum has been built up on the first wave of crypto currencies, and we are now embarking on what we believe is a much bigger opportunity into digital assets that are securities worldwide.
Q. How is Templum positioning itself for the future?
A. Templum is a fintech and blockchain holding company that is focused on the modernization of securities law that intersects with the most innovative technologies. Templum will continue to create new market infrastructure in clearance, settlement, custody and transfer of digital assets as securities to create standardization, best practice, and investor protection and will allow large pools of institutional capital to enter the digital frontier market.
The investment of the SBI Group, one of the world’s leading financial services, blockchain innovation, and investment groups, provides strong validation of Templum’s playbook. Together with SBI, Templum will look to expand across Asia, as it responds to market demands for extending the digital market in compliance with securities laws across national jurisdictions.
Q. What roles can tokens play in social impact and philanthropy?
A. One of the priority growth areas for Templum is providing digital assets as securities in the rapidly growing market of impact and sustainable investing, and in alignment with the UN SDGs.
Tokens will accelerate and leapfrog social impact and philanthropy by decades. They provide, for the first time, the ability to efficiently aggregate new global capital and tie this capital to integrated, transparent and incorruptible “impact deliverables”, tailored to meet the SDGs of the UN.
Pursuant to the JOBS Act, securities for the first time in US history can be advertised. The ability to advertise these opportunities on social media and other advertising modes allows for the inclusion and awareness of a need to diaspora communities, affinity groups and fan bases to allocate capital to areas of aligned priorities for those groups.
The power of tokenization here is about the ability of smart contracts to record results, and transcend boundaries to reach last mile and prior excluded and under valued populations; and to immutably support human identity, dignity and data ownership.
Q. How do you find the time to do all the things you do and be a family man?
A. Life is concentric circles, and family is at the core of that. When you do what is right for your family, you do what is right for all those around you. Passion creates energy, and the energy becomes the fuel to drive you to accomplish the most important objectives and goals in the world – which goes right back to doing what is right for family.
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