BlocksInform
Yesterday the team behind mortgage blockchain startup Figure Technologies filed an SEC listing for a special purpose acquisition company (SPAC) with plans to raise $250 million (as first noted by Coindesk) and merge with a suitable target firm. The senior management of Figure Acquisition Corp I are all executives at Figure Technologies, to which FAC is one of its ‘affiliated’ companies. A real estate financing firm called Elliot Management is investing in the venture.
Separately, LEDGER Insights learned that Figure Technologies is eyeing launching a blockchain-based stock exchange. We'll talk more about that later.
Previously, Figure Technologies has raised more than $220 million and created the Provenance blockchain. The company has a consumer-facing website where all loans are initiated (mortgage-related and otherwise) recorded into the Provenance blockchain. So far, it has more than $1.5 billion in funding lines and has used the blockchain to package up the mortgages as asset-backed securities.
The primary objective behind the Provenance Blockchain's consumer-facing website is to generate more activity on the blockchain. That may be one of the main reasons for setting up SPAC; it stated that any “target company” should be able to receive some benefit from Figure Technology including its proprietary technology.
Figure's CEO, and also founder of FAC, is Mike Cagney. Asiff Hirji is the President of both FAC and Figure and before that was President and COO of COINBASE and Ameritrade.
The fast-moving company also recently applied for a banking charter, receiving quite a bit of opposition from both incumbents and state banking regulators. It's unclear why opponents fear that if the company doesn't provide deposit insurance, it will be awarded a national banking charter. The purpose of Figure’s application is to develop a financial services app that targets people who do not have access to financial institutions. However, the company would have to apply for an extremely large number of additional state licenses without a national charter.
Figure plans to launch a decentralized stock exchange
Meanwhile, Figure is also considering launching a stock exchange with trades transacted on its Provenance blockchain.
The Gamestop stock price explosion caused Robinhood to block some trades. In part, this was due to the added margin obligations for Robinhood due to the two-day settlement time for institutional stocks. President Asiff Hirji wrote an opinion piece in which he argued for the need to do away with two-day settlement. It did not meet our self-promotion guidelines, so we did not publish it.
We previously noted that the company has its Adnales solution that uses the Provenance blockchain to enable companies to keep track of who owns its stock, the cap table. Currently, Figure is looking to develop their decentralized stock exchange solution.
In the words of Hirji, “When companies issue stock on Adnales, each stock certificate is a digital asset that lives on the blockchain, and there is no need for paper certificates at the DTCC”. It is very straightforward for a company to then use Marketplace on Provenance to run a secondary market for their equity.”
“With no counterparty risk and real-time trade settlement, the cumbersome, opaque and illiquid private company secondary market will be transformed. In the future, we believe as more companies use Adnales as a secondary market, institutional capital will follow. “Why would companies move from real-time settlement processes to archaic two-day settlement processes on the NYSE or Nasdaq when they want to go public?”
At this time, we must fix what we have, and therefore the SPAC is trading on the NYSE.
Other blockchain companies that are high-profile exist. One was Bakkt and another was trade finance firm Triterras which has run into headwinds from the dreaded short sellers.
