Digital Asset Transfer Agents — 2020 Review

Purpose

The purpose of this document stems from the following:

  1. End of the reporting deadline (March 31, 2021) for the calendar year 2020.
  2. Trend analysis of 2019 & 2020 filings.

Executive Summary

TA-2 report data from 2019 & 2020:

For calendar year 2019, only Securitize reported volume. Harbor and Vertalo both filed a TA-2 form, but reported no volume. Tokensoft did not file a TA-2 form and is assumed to have had no volume.

Overview

Digital securities and asset Transfer Agents (TA) are new entrants into the well established transfer agent industry regulated by the Securities & Exchange Commission (SEC). This document evaluates the data reported to the SEC by four start-up digital asset TAs.

Regulatory Filings

Transfer agents are required to file yearly activity and audit reports as well as report business changes within 60 days of change. Activity and business change reports are available to the public at any time by visiting the SEC look up website and running a query against the Transfer Agent company name. Data from these publicly available reports provide the basis of this document.

Analysis

These are early days for start-up companies performing digital securities and asset transfer agent functions. Although it has been a mixed bag in this cohort of start-ups, low numbers are expected. In comparison, incumbent Transfer Agents process millions of transactions for a large public companies. Start-ups in this cohort not meeting compliance requirements is a concern.

Transfer Agent Review

Securitize, LLC

Securitize is demonstrating success executing against a strategic plan. Being the first in its class to obtain the TA license, Securitize has reported substantial year over year growth.

  • 97 items received for transfer during the reporting period.
  • 414 (326% increase) items received for transfer during the reporting period.
  • $71,211.99 in dividend disbursement and interest paying agent activities conducted during the reporting period 2020 against $0.00 reported in 2019.

Harbor Digital Transfer Agent, LLC

Harbor, acquired in early 2020 by BitGo, was the second digital asset start-up to obtain a TA license from the SEC as Harbor Digital Transfer Agent, LLC.

Vertalo, SECZ

Vertalo, a subsidiary of Series X, was the third start-up to obtain a TA license from the SEC as Vertalo, SEZC. Vertalo has increased its securityholder account activity year or year.

Tokensoft Transfer Agent, LLC (was DTAC, LLC)

DTAC, LLC received its Transfer Agent license on December 12, 2019 and rebranded itself to Tokensoft Transfer Agent, LLC in 2021.

Data Sources

The data sources for this document originate from the following:

  1. SEC Annual Audit Requirements
  2. SEC Covid-19 Relief Press Release
  3. SEC TA-1 Form
  4. SEC TA-2 Form
  5. SEC TA-W Form
  6. TA Market Share Analytics
  7. Company websites: Securitize, BitGo (Harbor), Vertalo, Tokensoft, DTAC

Tools

  1. SEC Document Metadata Search: Securitize, Vertalo, Harbor, Tokensoft

Comments

  • *Due to Covid-19, the SEC provided “relief” to Transfer Agents with regards to deadlines to submit forms and other information for calendar year 2019. This relief was extended up to June 30, 2020.
  • **The items being graphed from the TA-2 Form are 4(a) and 4(b).
  • Based on data available on April 13, 2021, 1 pm ET