Page 83 - Innovation Delaware 2018

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home to international stocks — think BMW, Volkswagen and Bayer Aspirin — that don’t want to meet reporting requirements necessary on the larger exchanges.
DBOT is aimed at those higher-value OTC stocks. And, as an alternative trading system regulated
by the Financial Industry Regulatory Authority, the firm is positioned to connect investors to startups looking for a less expensive way
to raise money. DBOT
went live May 2017, and
is currently doing an
average daily volume of
1 to 4 million shares; it is eligible to trade about 1,000 different stocks. Another feature of alternative trading systems, according to the U.S. Securities and Exchange Commission, is that they don’t regulate their members or surveil their own markets.
“DBOT is trying to bring a higher caliber of securities to the OTC space, and everything is blockchain-
ready, so the entire system supports the blockchain out of the box,” Sloves says. “And it has a built-
in funding portal — it is really crowdfunding, where you can do mini-IPOs via DBOT.”
Instead of spending all its money on lawyers and filings and registration fees, Sloves explains, a small startup
can go public through an online offering with DBOT. Filing with the firm and being listed on its system
costs about $15,000 a year, as opposed to the roughly $500,000 it takes to be traded on the Nasdaq. Looking ahead a few years, DBOT sees itself as well-positioned to trade
in cryptocurrencies like Bitcoin. “Since none of the crypto securities are ever going to qualify to be in an exchange,” Sloves explains, “it’s going to require them to come to the OTC market, and DBOT is going to be able to support that.” ID
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