ConsenSys AG, a venture production studio building decentralized applications and various developer and end-user tools for blockchain ecosystems, will make a strategic investment inNorth Capital Investment Technology, a market-leading provider of technology and brokerage services for exempt securities offerings, to accelerate the growth of its custodial platform and secondary trading infrastructure.
“Tokenization will have a profound impact on the securities business,” saidJoe Lubin, the founder of ConsenSys. “North Capital shares our vision that tokenization can be used to increase access to capital, improve liquidity and market efficiency, and reduce transaction costs.”
In 2017, North Capital rolled out its transaction platformTransactCloud, which enables the offering of exempt securities, including tokenized securities. North Capital Private Securities is a custodial broker-dealer that has focused on exempt securities since 2010 and will begin providing custody of securities tokens later this summer. The firm also has applied to become an ATS (an SEC-compliant Alternative Trading System)to facilitate secondary trading of securities tokens.
“ConsenSys is an ideal partner for us,” saidJim Dowd, founder and CEO of North Capital. “They bring unparalleled technical expertise. We had been exchanging ideas on custody and secondary trading last yearand it became apparent that we have a shared vision and could accomplish much more through collaboration than by working separately.”
“One of the exciting things about advising on a transaction like this is the opportunity to introduce visionary leaders to each other, allowing them to build innovative products and programs together,” saidScott Daspin, director of institutional sales at Triad Securities Corp, who advised on the transaction. “North Capital and ConsenSys are true standard-bearers in the industryand I expect them to do great things together.”
Dowd believes that secondary trading is an area that will especially benefit from the collaboration between ConsenSys and North Capital. “Many of the issues we are trying to address are timeless:How can we best bring liquidity into the market?How do we ensure fairness and transparency for market participants? How is the regulatory framework likely to evolve? There’s no single answer to these questions. We’re confident that our partnership with ConsenSys will lead to more thoughtful analysisand, therefore, to better outcomes in these areas.”