Security Token Startup Templum Shifts to Private Blockchains

Security token specialist Templum is shifting from public to private blockchains.

Announced Monday, enterprise software vendor Symbiont is building a private blockchain and smart contracts system that Templum will use for future security token offerings by its clients.

Previously, the regulated broker-dealer left the choice of blockchain protocol up to the issuers, but this posed problems, Templum CEO Christopher Pallotta told CoinDesk.

"A blockchain like public ethereum may slow down or stop capacity when you are in the middle of a million dollar or ten million dollar transaction," said Vincent Molinari, co-founder of Templum.

"We believe for securities issuance, you need a private, controlled blockchain [you] need control of the full lifecycle."

The Aspen tokens currently run on Securitize's private DS protocol.

One thing that made Symbiont an appealing choice for Templum was its ties to Citigroup and Nasdaq, both of which participated in the enterprise blockchain company's recent $20 million funding round.

The companies framed their partnership as a way to make the market for private securities - which are not registered with the Securities and Exchange Commission, but legal since they are offered only to sophisticated or wealthy investors - more efficient and transparent.

Molinari said the system whereby unregistered securities are transacted as it exists today is opaque and this results in numerous frictions and added costs.

"Investors want greater access to companies. Entrepreneurs want a larger pool of investors. They want more streamlined capital raising processes and they want enhanced liquidity - all the things that were sort of promised with ICOs.".