Exclusive: Crypto securities venue Prometheum raises $20M
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Prometheum, a tokenized securities firm, raised $20 million in fresh capital in order to expand its offerings, the company tells Axios exclusively.
Why it matters: Putting traditional financial assets on chain has been a drumbeat for at least a decade, and it's heated up in recent years.
- Tokenized securities proponents envision capital efficiency gains across the financial sector for securities that exist in a wholly on-chain digital format.
- The money came from an undisclosed list of individuals and institutions, bringing Prometheum's total raised to around $64.3 million.
What they're saying: "I think that the real growth in the industry will be securities migrating to a blockchain," co-CEO Aaron Kaplan told Axios.
- Prometheum has two subsidiaries. One is an an alternative trading system that's expected to launch in Q1 2025, according to a release from the firm.
- The second is a custodian that's currently providing services to institutional investors in a handful of familiar crypto assets. The funding will support adding more crypto assets and forthcoming security tokens.
- Kaplan declined to give more details on the use of the custodian other than to say it is growing and will probably create an offering for retail users.
What we're watching: An early win will come if institutions begin to issue securities on-chain and then turn to the company's special purpose broker dealer and its trading platform to activate those assets.
- Kaplan says some securities along these lines have been issued as experiments, but there haven't been venues to make good use of them.
Kaplan described decentralized finance (DeFi) on public chains as a sort of R&D lab for finance, which he hopes will become useful for traditional finance.
- For example, he pointed to how DeFi uses collateral. The collateral on a loan becomes instantly available for an investor to use when they close a loan. There's no wait for final settlement in DeFi.
- In pure time-value of money terms, exporting that to securities trading would be a capital efficiency win for existing financial institutions, he said.
The big picture: Kaplan is bullish about 2025, with the industry facing a pro-crypto administration. He believes tokenized securities will be a big part of the story next year.
- "When very large institutions feel comfortable with a new technology where they are not going to get a weird letter from the government, they are willing to apply those technologies," Kaplan said.
