Republic could create secondary exchange for digital titles, fueled by $ 150 million in new funding – TechCrunch

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There is a lot of frustration in the startup world when a digital asset is and is not security in the eyes of the United States Securities and Exchange Commission.

Where many see regulatory vagueness, the New York-based investment platform for five years Republic sees an opportunity. Indeed, while many companies are grappling with whether to distance themselves from certain digital assets, Republic – whose CEO, Kendrick Nguyen, began his career in securities litigation with Goodwin Procter – has focused from the start. departure on the establishment of an essential brand for what Nguyen calls “compliant tokenization”.

Now the company hints at big ambitions to expand what it has already built to create, potentially, a compliance-driven marketplace for digital titles – with an emphasis on “titles” – to buy and to resell.

As Nguyen told us on a call late last week, “in the United States, none of these major exchanges deal with digital security tokens,” that is, tokens that derive their value from an external, tradable asset like real estate, versus utility tokens that provide a right to use a product or service.

For example, it’s because the SEC did it very simple that it considers XRP, the cryptocurrency developed by Ripple Labs, as a security, which exchanges like Coinbase do not list it for sale.

Nguyen said the Republic would be ready to “partner right now” with an exchange “that is capable, that offers good customer service, and that can facilitate secondary active trading in securities and digital securities” in the United States. maintains, therefore “if in another year we don’t see a solution, Republic will look to invest or build directly through an affiliate, a secondary exchange for digital securities”.

It would be one of the most ambitious products in a growing list of products overseen by Republic that have attracted over a million users, as well as significant financial support.

Even today, the company announces a $ 150 million Series B round led by Valor Equity Partners, following a $ 36 million Series A round announced in March by Galaxy Interactive, Motley Fool Ventures, HOF Capital, Tribe Capital and CoinFund. (These early investors have just relaunched, and were joined by new backers Pillar VC, Brevan Howard, GoldenTree and Atreides.)

In total, according to Nguyen, Republic, which employs 200 people, raised more than $ 50 million in equity financing before this new round, and more than $ 20 million in token sales.

The outfit is certainly busy putting everything into action. Republic already includes several different business branches, including a popular retail investment platform that invites people to invest with as little as $ 10; a private equity division with nearly $ 1 billion in assets under management that channels accredited investors to startups; and a blockchain consulting arm that provides technical, financing, distribution and tokenization services.

Republic also currently has two affiliated closed-end funds deploying capital in startups and crypto projects, as well as a digital investment arm operating under the name Republic Realm that focuses exclusively on metavers and crypto NFT.

When asked how Republic is handling all of this, Nguyen replied “not to think of it as different platforms” but as a company that can cater to anyone, whatever their interests or balance. from his bank account. “If you’re a multimillionaire coming to Republic and it’s not worth the $ 100 investment but want to deploy $ 100,000, we have these opportunities for you. If you’re 20 and want to invest $ 20 in a video game or real estate or a founder, we have those opportunities too.

The idea is to respond to “the whole population,” he says, and he insists that Republic can achieve this through the technical capabilities it has developed – as well as a guiding principle. It is Republic’s firm belief that “most tokens, including in the DeFi and NFT space, are securities.” As a result, he said, “whatever Republic does, whatever we touch, we treat it as securities as a whole and place them within the existing framework of US securities law.”

If other investment platforms want to push back on the SEC, that is certainly their prerogative. As for Republic, Nguyen said, “We are not looking for new rules and regulations to do what we do. What we do is based on existing law, on a solid legal basis.


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