Cryptocurrency startup Swarm is the talk of the town today in the world of cryptocurrency. As the ogre was seen trading tokens that allow investors to purchase fractional shares in privately-owned fintech giant Robinhood. Robinhood is a wildly-popular commission-free stock trading app that earned a $5.6 billion valuation recently.
Swarm sells Robinhood shares
Despite the hurdle that Robinhood isn’t holding a security token offering (STO), Swarm managed to find a way to bring Robinhood shares to the public anyway. Swarm’s ambitious plan to democratize venture capital would work through partnerships with brokers and syndicate managers. With their help, Swarm has sourced equity from former Robinhood employees looking to cash out before the firm’s eventual IPO. The given equity is held by a shell company, whose shares are then listed on the Swarm platform as SRC-20 tokens.
Robinhood unaware of the progress
However, when contacted for a response, a Robinhood spokesperson stated that the firm wasn’t aware of any such trade. The firm had given a similar response back in June when Swarn planned to turn Robinhood shares into cryptocurrency tokens. However, the cryptocurrency platform confirmed that all this is possible without Robinhood’s permission.
Regardless, these tokens are now live on the Swarm platform with a hard cap of $1 million in contributions. Philipp Pieper, CEO of the crypto startup Fund mentioned said, “Secondary equities transactions and refinancing of legal entities which hold private company equity are not new in the United States. What’s new here is the tokenization of these assets, and the doors opened by this innovation”.
Talking about the blockchain technology, he also added,
One of the key innovations of tokenization is that token owners can participate in the value creation of the very network they are part of. Swarm is bringing this paradigm shift to companies that are key players within this movement, but have yet to permit the network to participate.
Earlier, Swarm had also announced plans to tokenize equity in other privately-owned tech companies such as Ripple, Coinbase, and Didi. However, the firm has not listed shares of any of these companies its platform.