Yesterday, blockchain startups engaged in equity tradingSwarm FundAnnounced that a new equity token will be launched, allowing Swarm investors to hold equity in well-known blockchain companies such as Ripple, Coinbase, Robinhood, and Didi. But the companies involved quickly condemned the practice.
In the early hours of this morning (Beijing time), Robinhood issued a statement stating that it was not aware of Swarm and its plan to equity trade before, and that it will not be associated with Swarm in any form. Coinbase said it had issued a restraining order to Swarm, and Swarm’s new announcement has also removed the planned mention of Coinbase.
Generally speaking, equity tokens are issued by the owners of the company, and the tokens are linked to the shares of the company. However, once this model constitutes a public offering, it violates the relevant regulations in China, and there are many restrictions abroad. As a result, Swarm is calling the move democratizing investing, allowing any investor to own equity in some of todays most famous tech startups.
In order for investors to buy equity in the above-mentioned companies, Swarm acquired its equity in various ways, some from options, some from venture capitalists and employees shares.
Coinbase stated that although the equity is distributed in the hands of multiple shareholders, as a private company, Coinbase does not allow shares to be publicly traded in the secondary market due to legal and development plans. Coinbase will take appropriate action if it discovers that someone has sold shares in violation of the agreement. Although Ripple, the other subject, did not speak publicly, a representative of Ripple also issued similar accusations in response to Coindesk, saying that Ripple has no record of Swarm buying its equity, and will not approve such an acquisition.
According to the data, Swarm was established in 2014 and is mainly engaged in equity trading and proxy investment. The platform uses artificial intelligence to provide suggestions for investors to optimize their investment portfolios, and tries to allow retail investors to obtain investment opportunities reserved only for large investors. The platform also issues SWM, an Ethereum-based ERC20 token, for payment of transaction fees.
