FINRA approves first equity crowdfunding platform in US to operate ATS

Goldman Sachs-backed Circle announced that its equity crowdfunding platform, SeedInvest, has received approval from FINRA (Financial Industry Regulatory Authority) to operate an Alternative Trading System (ATS) for secondary market trading of equities launched through its primary markets platform.

Once launched, SeedInvest will be able to allow investors to trade their startup shares on the secondary market post initial investment. The announcement marks an industry milestone as SeedInvest is the first equity crowdfunding platform in the US to receive FINRA approval permitting secondary trading of securities through an ATS, in addition to capital raises in the primary markets.

A critical missing piece in private capital markets has been the lack of exchanges and marketplaces for secondary market trading and liquidity of private securities, and the past couple of years have witnessed an explosion in experiments in private capital formation and secondary liquidity, with blockchain-powered digital assets becoming a major new category of assets and technology systems for markets.

“We believe we are in the early stages of a much broader transformation of global capital markets, and that we will see mature, internet-based capital markets emerge that give companies ranging anywhere from the seed to growth stages more ways to raise capital, as well as a much broader base of investors access to invest in those companies while also having opportunities to trade those assets through regulated marketplaces,” Circle said in a statement.

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