Crypto Push by Republic Investment Platform Sparked by New Token

Republic, the largest private investment platform, will issue a digital profit-sharing token on the Algorand blockchain next month as more financial firms begin to embrace cryptocurrencies.

New York-based Republic, with more than 700,000 users, plans to release the token on July 16, Chief Executive Officer Kendrick Nguyen said in an interview. The token gives customers access to profit from all deals done on the platform, not just the ones they may have allocated money to, he said.

“This dividend, profit-sharing token will be widely available to non-accredited as well as accredited investors,” Nguyen said.

Republic allows so-called non-accredited investors a chance to get in on the startup ground floor with as little as $10, and has grown by over 700% in the last 18 months. Republic users have invested $130 million in more than 200 startups in the last four years -- $110 million since the start of 2019, Nguyen said.

The Securities and Exchange Commission requires accredited investors to meet conditions such as having a net worth of at least $1 million and an annual income of at least $200,000. Republic has offered crypto-related investments since 2017, and Nguyen said it’s time to push digital currencies and blockchain projects beyond the enthusiasts they cater to today.

“We aim to drastically move the needle” on crypto adoption, Nguyen said. “Today we have 700,000 users but we aim to have 700 million one day.”

There are signs that blockchain and digital currencies are gaining wider acceptance. River Financial, a startup financial-services firm, said its growth is being driven by “Bitcoin Boomers” over the age of 55. Reddit, one of the most popular web destinations in the U.S., has a deal with Ethereum to provide tokens. And PayPal and Venmo will offer direct sales of cryptocurrency, CoinDesk reported, citing people it didn’t identify.

While accredited investors can buy the new token beginning July 16, non-accredited investors will have to wait for Republic to receive SEC certification. Non-accredited investors can show indications of interest that will allow them to buy the token once the SEC qualifies Republic’s application, Nguyen said.

Republic is capped at raising $8 million through the sale, which could equate to about 68 million tokens, Nguyen said. The money will go toward growing and maintaining the digital token and to help find new deals for investment.

Previously, only accredited investors -- who make up only 3% of all U.S. investors -- could benefit from early access to both traditional and crypto projects, Nguyen said. Crypto is still too exotic for many who’d prefer to own shares of IBM, he said.

“The Republic token will change all that,” Nguyen said. “The blockchain industry needs adoption.”

©2020 Bloomberg L.P.

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