Securitize becomes first to debut shares on NYSE and onchain, but it won't be the last

Leading tokenization firm Securitize (SECZ) began trading on the New York Stock Exchange on Thursday following a business combination with Cantor Equity Partners II late Wednesday. 

After opening at $12.45, SECZ hit a midday high of $13.70, about a 10% jump, and closed the day at $12.30.

Securitize also launched tokenized versions of full SECZ shares on Solana and Avalanche, enabling broader global access to the stock and 24/7 trading, among other potential use cases.

This means that even though traditional U.S. stock markets will be closed Friday in observance of Independence Day, SECZ will continue to trade.

"We're gonna eat our own dog food," Securitize President Brett Redfearn told The Block, discussing plans to bring stocks onchain. 

While some firms have issued versions of their stock onchain, Securitize is the first to do so at debut. However, Redfearn believes this won’t be true for long. 

Redfearn, who served as director of the Securities and Exchange Commission's trading and markets division, said Securitize has been having numerous conversations with "capital markets desks at the largest investment banks," like JPMorgan, about getting IPO allocations to be distributed "to crypto investors in a tokenized form to like MetaMask wallets or OKX wallets."

"The conversation isn't theoretical. It's operational," he said. "We're gonna see this within the next three to six months. I definitely think we're gonna see it within the next year."

According to Redfearn, Securitize "tried to get in on SpaceX," but "it was a little early." SPCX went public June 12, and in many ways was a testing ground for some novel blockchain-based services, like pre-IPO markets and tokenized trading. 

Real-world assets as a category are beginning to balloon, with the sector seeing continuing growth that some analysts project could reach trillions of dollars. 

Expand Chart

Issuer-sponsored approach

While tokenized wrappers of shares are beginning to take off on platforms like Kraken, via its xStocks subsidiary, and other exchanges, Securitize is taking a different approach. 

Stocks tokenized through Securitize won’t merely be backed 1:1 with an underlying asset, but will be issuer-sponsored tokens, where the token itself is the security, as per the Security Exchange Commission’s preliminary tokenization guidance. 

What this means is that Securitize tokenized equity retains full entitlements, like voting rights and dividends, and "can be removed" from the Depository Trust Company (DTC), the central book-keeping securities depository for nearly all U.S. stocks.

This is because Securitize operates blockchain-native versions of the existing securities tech stack, including its own transfer agent, broker-dealer, fund services business and adviser, Redfearn noted. 

"We're a very vertically integrated company," he said. 

Some Securitize competitors, like Superstate and tZERO, have also taken the route of issuer-sponsored tokenization, though Redfearn argued Securitize remains largely alone in its "holistic" approach.

"There are some people who compete with us who have registered transfer agents. We have a broker-dealer," he said. "There are not that many who have a transfer agent and a broker-dealer."

Securitize also operates an alternative trading system (ATS), a platform where Securitize-issued and non-Securitize-issued tokens can trade. 

Tokenization advocates will often point to international reach and round-the-clock trading as particularly potent improvements that blockchains provide. Redfearn agrees, but notes the wider DeFi ecosystem outside of Securitize is also developing uses for tokenized assets as novel forms of collateral or for depositing into yield-bearing vaults.

He said that he himself has run a "looping strategy" on a tokenized fund Securitized tokenized for asset manager Apollo. 

The right time

Securitize indicated it was looking to go public through a merger with Cantor Equity Partners II in October, with plans targeting a listing in the first half of the year. According to its latest financial statement, Securitize has $3.4 billion worth of tokenized assets under management across its 650 active funds.

The company reported Q1 revenue of $19.5 million, up 39% from the same quarter a year earlier and its best to date.

The firm’s S-4 registration became effective in June, dispelling rumors that Securitize would seek to delay its listing, as several other crypto firms have indicated, citing weaker market conditions. 

"I think the timing is really good because we're approaching a tipping point in tokenization for financial services generally, and Securitize is, in my view, in the clear leading position as an infrastructure builder," Redfearn said. 

He confirmed Securitize was not bound by a contractual agreement to go public at this time, or faced a financial penalty. 

Asked about potential ethics issues considering Cantor Fitzgerald’s relationship to Treasury Secretary Howard Lutnick, Redfearn noted he believes there are "satisfactory walls in place," especially considering Lutnick’s divestment from Cantor Fitzgerald. 

"Cantor Fitzgerald is definitely the leader in SPACs in the digital asset space, so they were the right partner for very, very different reasons," Redfearn said, adding that "Securitize is looked upon by the SEC and by regulators as a good actor," and that is not a reputation they would jeopardize.

With the public listing and a $400 million PIPE raise last year, Redfearn said the firm is looking to use the funds on hiring, product build-out, ecosystem development, and potential M&A.  

"The timing is exactly right," Redfearn said. "I love the idea that we're fueled to escalate our growth trajectory right now."