At DigiFunds, the blockchain-based, real asset-backed digital investment platform that solves venture funding limitations with digital crowdfunding, we put transparency first and empower our users.
Leveraging the power of blockchain technology, which provides a more secure alternative to traditional investment opportunities, companies of any size and from any industry can access the capital they need to be successful. While investors get access to a broad pool of the most exciting new startups.
Prabhat Singh, DigiFunds’ chief technology officer (CTO), explains the approval process for compliance that the company is currently working on.
“To operate as a crowdfunding intermediary, you must join the Financial Industry Regulatory Authority (FINRA). Then to comply as a funding portal, you register with the Securities and Exchange Commission (SEC). Finally, there is the Money Services Business (MSB) license, which requires us to register with the federal government.”
Blockchain-built crowdfunding puts transparency at fore
Blockchain technology has the potential to democratize capital markets by providing a more accessible, transparent, and secure platform for investors to participate in financial markets.
Blockchain sits on a decentralized, distributed ledger that records all transactions made on the network. This ledger is totally transparent, meaning that with access to the blockchain, anyone can view all the transactions made on it.
Transparency is a key feature in building trust in the digital financial system. Because every transaction is recorded and verified, it is much harder for bad actors to manipulate or falsify records for fraud or other nefarious activities. The network verification system inherent in blockchain technology is known as proof of work (PoW). PoW enables the creation of decentralized marketplaces, allowing individuals and entities to trade directly without intermediaries. This eliminates the need for a centralized authority, such as a bank, financial institution, or government regulatory agency, which can often create barriers to entry and restrict access to financial markets.
Transparency also increases efficiency in capital markets. With a transparent system, investors can view all transactions and market activity in real-time, allowing them to make more informed decisions. This can help to reduce information asymmetry, where some participants have more information than others, leading to more efficient pricing of assets.
With all transactions recorded on the blockchain, it is possible to trace the ownership and history of assets, making it easier to enforce regulations and ensure compliance with the law. This can help to improve accountability in capital markets by increasing investor confidence in the system, as they know that their investments are being traded on a transparent and accountable platform.
Find out more about the DigiFunds platform here.