Key Developments in Tokenized Securities
Uphold has submitted an application to FINRA, the regulatory authority for U.S. securities brokerage firms and brokers, with the intention of offering tokenized securities to its U.S. customer base. This strategic move, if approved, will see Uphold's consumer application integrate tokenized shares of private companies, marking a significant advancement in on-chain finance. The company anticipates making these tokenized shares available to consumers by late 2026.
To facilitate the launch of these tokenized security services, Uphold has established a partnership with tZERO, a prominent innovator in blockchain-based multi-asset infrastructure. This collaboration will integrate tZERO's comprehensive trading, clearing, and custody solutions into the Uphold application, ensuring a robust framework for handling tokenized securities.
Industry Perspectives on Tokenization
Simon McLoughlin, CEO of Uphold, commented on the evolving financial landscape, stating, "We’ve reached an inflection point where almost all players in the global financial system now recognize the transformative power of blockchain technology. Tokenized securities and real world assets (RWA’s) represent the next frontier for the integration of blockchain technology into traditional finance – building on the strengths and utility of conventional services while adding new features and extending access to more people."
The partnership with tZERO, one of the few Special Purpose Broker-Dealers in the U.S., is designed to provide several key benefits to Uphold customers:
- •Secure custody of tokenized securities: Through tZERO's on-chain custody and clearing capabilities, Uphold can offer blockchain-based investments within a regulated broker-dealer operational structure, ensuring security and compliance.
- •Streamlined clearing and cash management: The collaboration ensures regulated clearing, settlement, and cash management services for tokenized securities, which is expected to enhance efficiency and reduce transaction friction.
Alan Konevsky, Chief Executive Officer of tZERO, highlighted the importance of regulated infrastructure in the maturing tokenized markets. "As tokenized markets mature, institutions need infrastructure that is both on-chain and fully regulated," he stated. "Our vision is to be the connective tissue in the tokenized securities space, bridging market participants, asset types and geographies. Partnering with Uphold allows us to connect their customers to digital securities through the same end-to-end framework we’ve built over years of regulatory and operational experience."
Alex Vlastakis, President of tZERO Digital Asset Securities, added, "Anchoring B2B2C partners like Uphold is part of our announced strategy to drive demand on our platform through partnerships and institutional connectivity. We are thrilled to open the digital asset securities market to Uphold’s extensive worldwide customer base."
About tZERO's Role in Tokenization
tZERO is recognized as a pioneer in blockchain and tokenization innovation within financial markets. The company delivers institutional-grade technology and a regulated marketplace for trading tokenized securities and other assets. tZERO's platform enables issuers to digitize and manage their ownership records, while simultaneously providing investors, institutions, and broker-dealers with expanded access to private assets. By integrating compliance, security, and automation, tZERO aims to redefine capital formation, trading, and ownership in the Web3 era.
About Uphold
Uphold is a financial technology company that views on-chain services as the future of finance. The company provides modern infrastructure for on-chain payments, banking, and investments. Through its Consumer Services, Business Services, and Institutional Trading offerings, Uphold delivers accessible and trustworthy financial services to millions of customers across more than 140 countries.
Uphold integrates with over 30 trading venues, including both centralized and decentralized exchanges, to ensure superior liquidity, resilience, and optimal execution for its users. The company maintains a strict policy of never loaning out customer assets and ensures it is always 100% reserved. Uphold is notable for its commitment to radical transparency, publishing its assets and liabilities every 30 seconds on its public website.
The company is regulated in the U.S. by FinCen and State regulators. In the UK, it is registered with the FCA, and in Europe, it is registered with the Financial Crime Investigation Service under the Ministry of the Interior of the Republic of Lithuania. Securities products and services are offered by Uphold Securities, Inc., which is a broker-dealer registered with the SEC and a member of FINRA and SIPC.
For more information on Uphold’s products and services, interested parties can visit uphold.com.
About tZERO Group, Inc.
tZERO Group, Inc. (tZERO), along with its broker-dealer subsidiaries, offers an innovative liquidity platform for private companies and assets. The company provides institutional-grade solutions for issuers seeking to digitize their capital tables using blockchain technology and subsequently make their equity available for trading on an alternative trading system. Through its broker-dealer subsidiaries, tZERO aims to democratize access to private assets by providing a simple, automated, and efficient trading venue for broker-dealers, institutions, and investors. All technology services are provided by tZERO Technologies, LLC. Further details can be found on their website.
About tZERO Digital Asset Securities, LLC
tZERO Digital Asset Securities, LLC is a broker-dealer registered with the SEC and a member of FINRA and SIPC. It serves as the broker-dealer custodian for all digital asset securities offered on tZERO’s online brokerage platform. The company operates in compliance with the SEC’s statement from December 23, 2020, concerning the Custody of Digital Asset Securities by Special Purpose Broker-Dealers. It is important to note that digital asset securities may not always be classified as "securities" under the Securities Investor Protection Act (SIPA). Specifically, digital asset securities that are considered "investment contracts" under the Howey test but are not registered with the Securities and Exchange Commission are excluded from SIPA’s definition of "securities." Consequently, the protections typically afforded to securities customers under SIPA may not apply. Additional information about tZERO Digital Asset Securities is available on FINRA’s BrokerCheck.
About tZERO Securities, LLC
tZERO Securities, LLC is a broker-dealer registered with the SEC and a member of FINRA and SIPC. This entity operates the tZERO Securities ATS (Alternative Trading System). More information regarding tZERO Securities can be found on FINRA’s BrokerCheck.
Investor Considerations
Digital asset securities, also known as tokenized securities, and specific investments may not be suitable or appropriate for all individuals. Investors should be aware that investing or trading in securities carries substantial risks. These risks include the absence of guaranteed returns, costs associated with buying and selling, and the potential lack of liquidity, which could affect pricing and an investor's ability to sell. There is always a possibility of losing invested principal. Furthermore, digital asset securities present unique risks, including but not limited to, fraud, market manipulation, theft, and loss.
Important Disclaimers
This release is intended for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security. It also does not constitute an offer to provide investment advisory or other services by tZERO or any of its affiliates, subsidiaries, officers, directors, or employees. Any reference to a specific security does not imply a recommendation to buy, sell, or hold that security or any other security. Nothing within this release should be construed as a solicitation or offer to buy or sell any security, future, option, or other financial instrument, nor as an offer to provide investment advice or services to any person in any jurisdiction. This release does not contain investment advice or opinions regarding the suitability of any security, and the views expressed should not be interpreted as advice to buy, sell, or hold any security. The preparation of the information contained herein did not consider the specific investment needs, objectives, and financial circumstances of any particular investor. This information has no regard to the specific investment objectives, financial situation, and particular needs of any specific recipient, and the investments discussed may not be suitable for all investors. Any views expressed herein were prepared based on information available at the time of writing and could change with updated or additional information. All information is subject to potential correction. Information may become unreliable quickly due to various factors, including changes in market conditions or economic circumstances.
Forward-Looking Statements
This release contains forward-looking statements. Additionally, tZERO, its subsidiaries, or their representatives may make forward-looking statements orally or in writing from time to time. These statements are based on expectations and projections about future events, derived from currently available information. Such forward-looking statements pertain to future events or future performance, including financial performance and projections; growth in revenue and earnings; and business prospects and opportunities. Forward-looking statements can often be identified by the use of terminology such as "may," "should," "expects," "anticipates," "contemplates," "estimates," "believes," "plans," "projected," "predicts," "potential," or "hopes," or their negative counterparts or similar terms, rather than historical data. When evaluating these forward-looking statements, various factors should be considered, including, but not limited to: the ability of tZERO and its subsidiaries to change direction; tZERO’s capacity to adapt to new technology and evolving market needs; the performance of individual transactions; regulatory developments and matters; and competition. These factors, among others, could cause actual results to differ materially from any forward-looking statement. Forward-looking statements are inherently predictions. The forward-looking events discussed in this release and other statements made periodically by tZERO, its subsidiaries, or their respective representatives may not occur, and actual events and results may differ materially and are subject to risks, uncertainties, and assumptions. tZERO, its subsidiaries, and its representatives are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, or because the forward-looking events discussed in this release and other statements made from time to time by tZERO, its subsidiaries, or their representatives might not occur.