The Ontario Securities Commission (OSC) has given temporary permission to a tokenization startup TokenGX to trade tokens on the secondary market.
According to OSC, TokenGX, a member of the TokenFunder group, has received permission to launch a pilot project to collect trade data on the secondary market. Trading operations will help TokenFunder, which allows other firms to attract financing through the sale of tokens, to provide liquidity for investors.
TokenGX was the first OSC approved company to conduct such testing. Note that back in October 2017, OSC exempted TokenFunder from the requirement to register as a dealer and approved the initial offering of FNDR TokenFunder tokens.
Secondary trading will take place on the FreedomX platform developed by TokenGX and will be limited to sellers and buyers who live in Ontario and are included in the “white list” of investors who went through TokenGX KYC processes.
Any participant on the platform can create new orders, and trading is carried out using smart contracts after traders complete a transaction through the interface of the order book. The platform is open to both accredited and retail investors, but trading volume for retail investors cannot exceed $ 2,500.
The regulator also requires investors to pay for the transaction using “settlement tokens on the balance sheet”, and not using fiat currency. Token GX will buy and sell these tokens at a fixed price of one Canadian dollar. Tokens can be obtained by transferring funds to the user’s trust account, which is managed by an unnamed Canadian custodian, and cannot be used in wallets outside the TokenGX system.
FNDR tokens can also be sold on the platform, along with tokens issued by ten Ontario issuers in conjunction with TokenGX. The financial statements of these issuers should be regularly reviewed by TokenGX as part of a pilot project.
In addition, TokenFunder participates in the ten-month Creative Destruction Lab (CDL) blockchain project accelerator program. The fact that the company is based in Ontario and is owned by a corporation in a Canadian province was also a plus for the Commission.
Back in 2017, the regulator of the Canadian state of Ontario announced that he would support cryptocurrencies and ICOs. To help companies comply with securities laws, OSC has created a dedicated team to quickly respond to cryptocurrency offers.
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