Home Business News Coinbase Exchange Wants To Stop New Crypto Startup Swarm From Issuing Tokens

Coinbase Exchange Wants To Stop New Crypto Startup Swarm From Issuing Tokens

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CCN reported that crypto startup Swarm revealed its new product a couple of days ago and now the company is facing a cease-and-desist letter from Coinbase.

Swarm labels itself as the first security token blockchain.

Via its tokenized model of fractional ownership, retail investors would be allowed to tap into assets of prominent startups such as Ripple, in addition to Coinbase without trying to qualify as an equity investor with those companies directly.

CCN reported that Swarm obtained shares of Coinbase which the largest digital asset exchange in the US, from “approved secondary market transactions to acquire vested employee shares, or from venture capitalists who have directly acquired equity from these companies.”

Coinbase serves cease-and-desist letter to Swarm

Accredited investors have funded Coinbase and it, served a cease-and-desist letter to Swarm claiming that it has no agreement with Coinbase to sell its equity.

Swarm co-founder and CIO Timo Lehes explained:

“By offering a Ripple token equity in Ripple, the company, Swarm Fund offers an answer to what some say is a limitation of Ripple’s XRP token as an investment. XRP is a top cryptocurrency, behind only Bitcoin and Ethereum in market cap, but it does not represent equity in Ripple or reflect the value of Ripple payment protocol. Investors looking for a more holistic piece of Ripple’s value may look to the Ripple Equity Token as a solution.”

“As a private company, Coinbase does not allow trading of stock on secondary markets for a variety of reasons, including the fact that there is not full and equal information available to the market. We will take appropriate action if we find people have sold Coinbase shares in violation of our agreements not to do so,” Coinbase told CCN.

Ripple said that “We have never spoken to Swarm, don’t have a record of them purchasing Ripple equity and would not have approved a purchase for this purpose.”