Investment platform TokenMarket has secured approval from the Financial Conduct Authority (FCA) to run its security token offering (STO) in the regulatory sandbox.
According to FCA, the regulatory sandbox allows businesses to test innovative propositions in the market, with real consumers.
The sandbox is open to authorised firms, unauthorised firms that require authorisation and technology businesses. It also offers tools such as restricted authorisation, informal steers, individual guidance, waivers and no enforcement action letters.
TokenMarket is planning to announce a launch date for its STO in the coming weeks and involve global investors to invest in its tokenised equity shares.
Since its establishment in 2016, TokenMarket claims that it has enabled to raise £240m for 30 start-ups, including utility token offerings such as Storj, Fetch.ai, Civic, Dent and Crypto.com.
TokenMarket said that the FCA’s approval is a major step in receiving a regulated and compliant ecosystem for STOs, as well as an easier way for companies to raise money.
Upon completion of STO and exited the sandbox, the company can organise STOs for UK and international to gather growth finance by tapping its pool of 170,000 investors.
TokenMarket is set to help a pipeline of determined start-ups, which plan to raise capital via STOs in London. The start-ups include: DOVU, Almond and Cryotech Nordic.
DOVU is a unified token, wallet and marketplace for earning and spending mobility-related rewards.
Almond is a free app that enables users to decrease their carbon footprint and rewards sustainable consumption, while Cryotech Nordic is a major provider of cryotherapy cabins.
TokenMarket managing director Ryan Hanley said: “We are delighted to announce the FCA’s approval for our STO, with the launch expected imminently. We look forward to exiting the sandbox, completing our fund raise and tokenised equity issuance, and then cracking on with launching STOs for other ambitious businesses.
“Access to finance is still a big issue for SMEs- it remains difficult and expensive, and this is holding back economic growth, and job and wealth creation. We hope our own STO can demonstrate that you can use blockchain technology to transform the way capital is raised.
“At the same time, we want to offer our wide and deep pool of international investors the type of exciting investment opportunities that were previously closed off to them. We believe STOs promise nothing less that the transformation and democratization of capital markets.”