First Security Token Trading Marketplace Openfinance Network May Be in Transition

Security token trading platform Openfinance Network may be in the midst of an executive transition. While the company has not issued any public statements, LinkedIn profiles of founder and co-CEO Juan Hernandez and co-CEO James Stonebridge have recently changed.

Stonebridge’s LinkedIn profile has been updated as CEO and President of Openfinance – no longer incorporating the co-CEO appendage. The change took place in May.

Hernandez’s LinkedIn profile now indicates his current position as Managing Director at Factor Labs an “entity that is building a distributed future.”

Stonebridge joined Openfinace as its Chief Operating Officer in 2018, becoming co-CEO in late 2019.

The possible executive change takes place at a time when it was widely reported that Openfinance was warning that tokenized securities trading on its marketplace may be delisted unless issuers anteed up more money. Openfinance generates revenue via buyer and seller commissions in a market for digital securities that is widely known to be quite thin.

While many industry observers expect all securities to become digital assets the transition from more analog securities to digital securities managed via distributed ledger technology has been slow at best. Recently, Brian Farber, General Counsel at Securitize – a primary issuance platform for digital securities, illuminated the reasons as to why security token liquidity has lagged in growth.

In a blog post from last year, Hernandez expressed his opinion that we are at a pivotal point of evolution in the capital markets to modernize and make them more accessible. At the beginning of 2020, Crowdfund Insider was told that securities listed on the Openfinance platform had a combined market cap of over $50 million – an important accomplishment but still not sufficient to generate sustainable revenue. Hernandez said he believed there was an opportunity for major volume growth in 2020. These statements were made prior to the COVID-19 crisis that has rocked all markets.

In November 2019, Openfinance raised over $8.6 million (out of a possible $50 million offering) but it appears the additional capital may have not been sufficient.

Last month, CI contacted Openfinance for more information but as of today, we have not received a response.

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