Crowdfunding platforms are a vital way for companies to raise money. In most cases, these projects offer physical rewards for backing their campaign. Indiegogo, one of the leading crowdfunding platforms, is expanding its functionality. Companies can now sell securities tokens on the platform in a regulated manner. The first securities token sale is active on the platform already.
Indiegogo Takes a Gamble
It is uncommon for crowdfunding platforms to take rather big risks. Allowing companies to sell securities tokens is an unusual business decision. For Indiegogo, however, the decision makes perfect sense at this time. Given the success of initial coin offerings, it is only normal other companies will try to get in on the action.
The first securities token sale is currently live on the Indiegogo platform. It pertains to a real estate securities token for the St. Regis Aspen Resort in Colorado. Aspen Coins, as these tokens are called, can be purchased with US dollars, Bitcoin, and Ethereum. Owning these tokens represents an equity stake without voting rights in Aspen Digital, the trust that owns St. Regis Aspen Resort.
Offering this new feature involves adhering to regulations. Indiegogo is collaborating with SEC-registered startup Templum Markets. Accredited traders can access this sale, whereas everyone else will not be able to invest in Aspen Coins. This measure is put in place to comply with the current rules outlined by the Securities and Exchange Commission. A total of 18 million tokens will be sold at the price of $1 each.
Transforming the ICO Industry
Given the crackdown by the SEC on ICOs, this new development by Indiegogo is rather interesting. Initial coin offerings selling securities need to file with the SEC. Projects failing to do so will be shut down sooner rather than later. Closely monitoring this industry will help bring more legitimacy to initial coin offerings as a whole and help weed out the fraudulent ICOs that are plaguing the industry. Indiegogo will need to be careful in terms of allowing companies to sell their securities tokens.
It is not the first time the crowdfunding platform ventured into a new market. The company launched its own ICO service in December of 2017. Through this venture, Indiegogo users can participate in SEC-compliant initial coin offerings. Allowing the sale of securities tokens appears to be a logical evolution of this existing feature.
The crowdfunding platform remains intent on democratizing access to capital. Moreover, they aim to bring investment opportunities to people across the United States and the rest of the world. By venturing into ICOs and securities tokens, an important step in the right direction is taken. It’ll be interesting to see what campaigns offering securities tokens will crop up next on the crowdfunding platform.
What do you think about Indiegogo now allowing sales of securities tokens? Let us know in the comments below.
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Author: JP Buntinx