Akemona Receives Regulatory Approval as the First Smart Contract-Based Funding Portal on Blockchain

Akemona, a pioneer in digital securities, announced that it has registered with the US Securities and Exchange Commission (SEC) and is now a member of the Financial Industry Regulatory Authority (FINRA) under section 3(h) of the Securities Exchange Act of 1934 and the corresponding SEC rules, popularly known as Regulation Crowdfunding. Akemona is the first smart contract-based funding portal to achieve this distinction. Akemona allows qualified businesses to raise funds by offering and selling zero-coupon bonds as digital securities on its platform.

Akemona was founded in 2018 by former executives of Fortune 500 companies. Akemona has developed the technology to manage the lifecycle of digital securities. Akemona applied for FINRA membership in April 2019 and received membership approval in August 2020. Marina Mataraga, Founding Partner, noted that the timeline for the approval is reasonable, given that digital securities is an emerging market requiring significant regulatory interpretation, analysis, and policy decisions.

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Digital securities introduce efficiency in capital markets. Traditional securities require complex post-trade processes and large investments in the infrastructure of depositories and clearing agencies for settlement of trades. These settlement processes take two days. Recognizing this as an opportunity, Ravi Srivastava, Founding Partner, focused Akemona’s technology on digital securities, which eliminates post-trade processing. Ravi emphasizes, “Digital Securities can be traded 24×7 and are settled immediately, providing full transparency of trade and pricing.”

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Brady Matthews, Chief Technology Officer, points out, “Akemona meets this challenge by introducing the aPledge™ software token to represent investment commitments as well as digital securities. Underlying an aPledge™ is a smart contract, which is a self-executing software containing the terms of the agreement between buyer and seller. This agreement is immutable and resides on a decentralized blockchain network. All transactions executed by the smart contract are visible on the blockchain, which allows full auditability of transactions by any third-party.”

“Polsinelli is delighted to represent Akemona in their use of innovative blockchain technology to enhance its crowdfunding platform under Regulation CF,” noted Stephen Rutenberg, Polsinelli shareholder and member of their Fintech and Regulation practice.

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