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Serica, formerly DigitalTangible, announces the December closure of its hard assets and blockchain trading business.
Serica, formerly DigitalTangible, announces the December closure of its hard assets and blockchain trading business that linked precious metals and other hard assets to the Blockchain via a browser-based trading wallet.
The company was one of the first to bridge the old world of precious hard assets to the new world of the Blockchain. It spent a year and a half building and developing the world's first and only commercial bitcoin2.0 digital asset trading wallet and now says goodbye to the markets and customers that launched the company in 2014.
Their innovative technology gave trading customers full control of their private keys that authorized the movement of their physical assets, anywhere in the world. In addition to converting hard assets into blockchain tokens, Serica built a network of global custodians in Singapore, Switzerland, Argentina and the United States. Asset trading included mostly precious metals, but also stock certificates, stored commodities and farmland titles.
Serica founder and CEO, Taariq Lewis, shares his thoughts on exiting the precious metals industry: “We were lucky to have the early adopters of new blockchain services come to us to make the impossible a reality: Hard assets secured by the blockchain with easy Peer-to-Peer trading. However, we are exiting this market to identify new opportunities in FinTech on which we can continue our company's growth. There are many others doing great work in this space and we think they will continue building where we have left off.”
Taariq Lewis further explains the reasons for closure to Cointelegraph: “Our competitors have easier legal clearance and seem to have the budget to cover the compliance costs needed to serve this business. The compliance costs to our company were simply too great for a technology startup at our stage of growth. We are leaving mostly because we have other more profitable business to pursue leveraging our technology. We think there's still a substantial opportunity to serve markets where bitcoin can solve big business problems, such as health-care payments. P2P hard-asset trading is exciting, but not as a big business problem as we had hoped.”
“I’m sure they had valid reasons to discontinue the service. They’ve run an exceptional business, and we learned a lot from them in our early stages,” says Alexi Lane, CEO and founder of Bangkok based fintech company Amilabs and its flagship project MidasRezerv. “High cost of compliance can be the issue, but since we don’t operate in the United States I don’t really know how expensive this can be. In general, starting and operating any fintech business in the US is already disadvantageous for startup companies due to necessary licensing and regulation costs.”
Lane never considered Serica to be a direct competitor, as they used a different business model, without issuing their own coin and allowing users to trade their assets in the blockchain marketspace. Something like a Bitcoin based Ebay. “We use more B2C sales oriented model, where we issue own gold-backed coin that represents gold already stored and fully verified with 3rd party custodian.“
“I could only imagine what a regulatory nightmare it is to issue your own gold backed token,“ Joshua Scigala, co-founder of Vaultoro, comments for CT. This Bitcoin-Gold exchange does not back a token because that would make it a currency issuer. Its transparency protocols use the blockchain to provide proof of a 100% reserve but they do not offer a transferable token backed by gold. When a member buys gold on the Vaultoro market place they buy the physical gold that is secured in their name as their property. When someone needs to spend that gold they convert it into Bitcoin instantly and spend it that way. “By doing this we are effectively a shop and not a currency issuer, we leave that part up to bitcoin.”
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