OpenFinance Asks Security Tokens Issuers To Help Cover Costs Or Platform Will Shutdown
Openfinance has threatened to delist all the tokens as they face imminent shutdown. They have requested the issuers of the tokens to renew contracts that would require them to part with more cash as they now have to service the platforms operational costs.
Reports have surfaced that Security Token Trading Platform; Openfinance has threatened to delist the tokens listed on their platform. This is unless they agree in new contracts to cover more of their operational costs.
Via an email circulated to all users of the Alternative Trading Systems Openfinance revealed that they have not witnessed swift growth on their platform as they had earlier anticipated to cover the operational overheads. They went further to issue a May 21st deadline for the token issuers to renew their contracts in a bid to remain operational or face delisting and cease trading operations.
“We have asked the issuers currently listed on the platform to renew their listing agreements and cover a portion of our costs.”
Notably security token platform unveiled in 2018 August, gave access to accredited investors in US to trade on the myriad of digital assets they offer on the platform. It also allowed non accredited investors to trade on some assets after completing a 12 month holding period. They had 3 rounds of funding backed by Sharpe Ventures, M25 and Huobi which raised about $8.6 million.
Openfinance however remarked that the Tokens would still enjoy seamless operations even if the platform shuts down. The issuers and their transfer agents would still have documentation and the users still get to keep their tokens in their digital wallets. The user funds are still in safe custody of an FDIC-insured institution, Evolve Bank in Arkansas.
They have listed a number of tokens since launch: Blockchain Capital’s BCAP token; SPiCE; Current Media’s CRNC token; Lottery.com’s LDCC token; and Protos’ PRTS.
Major Setback for US Investors
This would be a major loss to the US markets especially were among the sentiments shared by CEO of Security Token Market, Kyle Sonlin. He however noted that the issuers would simply migrate to alternative platforms seamlessly further demonstrating tech advancements in the field.
Openfinance is hopeful the issues will be resolved before they are forced to abandon their operations. They have however promised to fully coordinate with issuers and agents to make sure transition and migration from their platform is smooth.