Securitize takes contrarian view in crypto's war with the SEC

Quick Take

  • Securitize doesn’t buy the argument that crypto companies don’t know how to register with U.S. regulators — it’s done it.

Securitize, Inc., a blockchain firm that specializes in tokenizing real-world assets, doesn't buy the argument that crypto companies don't know how to register with U.S. regulators — it's done it. 

"People don't know how to register?" Carlos Domingo, the company's founder and CEO, asked. "Well, we know how to register. It's just the normal registration path."

He was referring to some of the heated discourse that's occurred as crypto exchanges Coinbase and Binance battle fresh lawsuits brought by the U.S. Securities and Exchange Commission and argue for new legislation for the sector. On Wednesday, Gemini co-founder Tyler Winklevoss called the SEC "downright evil" for bringing lawsuits in an attempt to "destroy crypto companies under the false premise that the rules are clear when they know they are not."

Coinbase CEO Brian Armstrong has also been a vocal critic of the regulator and argues that the registration process for crypto firms has not been clear

'These are the rules'

Securitize, for its part, was founded in 2017 and has raised over $120 million. The company obtained a registered transfer agent license in July 2019 and owns a broker-dealer. 

"We have this set of licenses, and the underlying technology, to be able to take the tokenization process from end to end," Domingo said in an interview, acknowledging that tokenization "starts with the premise that this is regulated."

"What the SEC is telling everybody is that 'if you want to register, these are the rules,'" he continued. "The SEC is not going to create a different path for crypto people that is that is completely different than what other companies do."

While Domingo said Congress could eventually pass new legislation, he said it would be unlikely in the next two to three years given. And despite concern that crypto firms could start to offshore some activities, he doesn't see too many companies leaving the country outright. 

Going to Dubai?

"It's 20% of the world's economy, but it's 40% of the world capital markets," Domingo said. "Whoever thinks that they can ignore the U.S. is probably missing out on the biggest, most mature, most sophisticated financial services market."