In brief

  • Watchdog Capital has announced digital securities sales platform, Gladius.
  • In the past couple of years, securities have been a complicated subject for crypto companies.
  • Gladius allows issuers to more easily issue and sell securities to the public.

Watchdog Capital, a broker-dealer registered by the U.S. Securities and Exchange Commission and a member of FINRA, today announced Gladius, a matchmaking platform for digital securities sales.

On Gladius, which is in beta and currently is not conducting any securities sales, investors will be able to invest in crypto companies’ token sales, many of which may be considered securities sales by the SEC. 

Gladius handles all the money transfers and serves as a shiny, regulated platform on which companies can issue and sell securities. 

It isn’t the first to offer such a service. Gladius must compete with companies such as Securitize. The difference is that Gladius comes from Watchdog, a regulated broker-dealer. Securitize is not

“There is a great need for capital and business formation in the United States and many new securities structures, business models and business plans are emerging as the world is changing," said Bruce Fenton, CEO of Atlantic Capital, and a registrant of Watchdog Capital, in a statement. 

Securities have been a touchy subject in the world of crypto. If the SEC determines that a cryptocurrency token is a security, it means that they think that selling it constitutes an investment contract. So, if a company is selling a cryptocurrency in an ICO as a way of raising capital, the SEC might think that they’re selling an investment contract to investors.

To do so legally, crypto companies must first register with the SEC or file a registration exemption with the Commission. Registering is a tricky and expensive affair, so many crypto companies try to make sure that their ICOs don’t attract the ire of the SEC—largely by restricting these token sales to “accredited investors” (high net worth buyers) or just staying out of the US market altogether.

But, for the past couple of years, the SEC has chased after several high profile ICOs. Telegram, Block.one, and Kik have all been hounded by the SEC for raising money through their ICOs.  

Gladius hopes to plug the gap. “This platform allows issuers to more easily issue & sell securities to the public,” said Fenton today on Twitter. “Security status shouldn’t be avoided.” 

Daily Debrief Newsletter

Start every day with the top news stories right now, plus original features, a podcast, videos and more.