The cryptocurrency bank Galaxy Digital was granted a broker-dealer license extension by the Financial Industry Regulatory Authority. This would clearly help the company become the largest and most recognized crypto-related bank in the world. Galaxy Digital is also trying to issue security tokens.
Galaxy Digital Receives Broker-Dealer License
The cryptocurrency industry continues expanding with Galaxy Digital trying to issue security tokens. The bank led by Michael Novogratz will gain a first-mover advantage over other banks and companies that are trying to enter the security tokens offerings (STOs) market. This is according to a recent report released by Bloomberg.
At the time of writing, cryptocurrencies have a market valuation of almost $274 billion, with Bitcoin (BTC) alone owning around 71% of the whole market. The remaining top 10 digital currencies account for $54 billion, and yet there are more than 2000 cryptocurrencies.
During 2017 and the beginning of 2018, there have been thousands of Initial Coin Offerings (ICOs) in the crypto market. Many of these ICOs were created by firms that were trying to gather funds to develop a product or a project related to blockchain technology or digital assets.
Nevertheless, most of these Initial Coin Offerings were not able to succeed and many of them faced regulatory issues with regulators around the world. Meanwhile, STOs represent a different way of fundraising that is expected to disrupt the whole IPO market.
One of the main differences with ICOs is the fact that STOs are regulated and provide certainty to investors about which are their rights and obligations. At the same time, STOs tend to be much more prepared projects than those presented by ICOs that could only have a white paper and nothing else.
Michael Novogratz commented about it:
“It’s a really young industry, and we are a pretty young business. We are sober and patient about how fast it will grow, and we are well capitalized. This feels like a perfect addition.”
As mentioned before, Galaxy Digital will have a first-mover advantage. However, this does not mean that other banks would not be part of the market in the future. Nevertheless, Mike Novogratz explained that traditional banks do not have the DNA they need to understand the cryptocurrency community. Furthermore, they will also try to understand how projects evolve, what they need, what works and what does not work.