Digitally Encrypted Securities Platform, Along With Methods And Systems For The Same
Various embodiments of the present technology relate to methods and systems for securely transferring securities and for preventing naked short selling of securities. In some implementations, the system receives inventory securities available for pre-borrowing and authorizes placement of a right to pre-borrow the one or more securities at an auction administered by an alternative trading system. The securities that are auctioned to a bidder are then received into a first addressed account associated with the token generator. In response to receiving the securities into the first addressed account, the system generates a token indicating one or more borrowing parameters. Upon receiving notification from the alternative trading system that the token is matched with a bid, the system cryptographically signs a transaction to transfer the token to a second addressed account associated with the bidder. Thereafter, if the bidder so chooses, the token can be sold to other customers.
1 . A computerized method comprising:
receiving inventory of one or more securities available for pre-borrowing;
authorizing placement of a right to pre-borrow the one or more securities at an auction administered by an alternative trading system;
receiving, into a first addressed account associated with a token generator, the one or more securities that have been auctioned to a bidder;
in response to receiving the one or more securities into the first addressed account, generating a token indicating one or more borrowing parameters; and
upon receiving notification from the alternative trading system that the token is matched with a bid, cryptographically signing a transaction to transfer the token to a second addressed account associated with the bidder.
2 . The computerized method of claim 1 , wherein cryptographically signing the transaction to transfer the token comprises electronically signing, with a private key of the first addressed account, and wherein the computerized method further comprises generating baseline pricing for the right to pre-borrow the one or more securities, wherein the baseline pricing is a price at which bidding can begin.
3 . The computerized method of claim 2 , wherein the baseline pricing includes a fee payable to an owner of the one or more securities, wherein the computerized method further comprises paying the fee to the owner of the one or more securities when the one or more securities has been pre-borrowed.
4 . The computerized method of claim 1 , wherein the one or more borrowing parameters includes an identity of the one or more securities auctioned to the bidder, a bid amount to pre-borrow the one or more securities, and an owner or beneficial owner of the one or more securities, and wherein the method further comprises: sending, to a distributed ledger, a request to record the token and ownership of the token on the distributed ledger.
5 . The computerized method of claim 4 , further comprising: communicating, to the distributed ledger for recordation, the transaction to transfer the token to the second addressed account associated with the bidder.
6 . The computerized method of claim 1 , further comprising: before generating the token, receiving confirmation from a distributed ledger, that the one or more securities is associated with the first addressed account.
7 . The computerized method of claim 1 , further comprising:
communicating a final auction price to the alternative trading system; and
authorizing a resale of the token in a secondary market.
8 . The computerized method of claim 1 , wherein the one or more securities comprises at least two different securities to be used to create one or more shares of an exchange traded fund.
9 . A non-transitory computer-readable storage medium comprising a set of instructions that, when executed by one or more processors, cause a machine to:
receive inventory of one or more securities available for pre-borrowing;
authorize placement of a right to pre-borrow the one or more securities at an auction administered by an alternative trading system;
receive, into a first addressed account associated with a token generator, the one or more securities that have been auctioned to a bidder;
in response to receiving the one or more securities into the first addressed account, generate a token indicating one or more borrowing parameters; and
upon receiving notification from the alternative trading system that the token is matched with a bid, cryptographically sign a transaction to transfer the token to a second addressed account associated with the bidder.
10 . The non-transitory computer-readable storage medium of claim 9 , wherein the set of instructions that, when executed by the one or more processors, cause the machine to cryptographically sign the transaction to transfer the token further cause the machine to:
electronically sign, with a private key of the first addressed account; and
generate baseline pricing for the right to pre-borrow the one or more securities, wherein the baseline pricing is a price at which bidding can begin.
11 . The non-transitory computer-readable storage medium of claim 10 , wherein the baseline pricing includes a fee payable to an owner of the one or more securities, wherein the set of instructions that, when executed by the one or more processors, cause the machine to pay the fee to the owner of the one or more securities when the one or more securities have been pre-borrowed.
12 . The non-transitory computer-readable storage medium of claim 9 , wherein the one or more borrowing parameters includes an identity of the one or more securities auctioned to the bidder, a bid amount to pre-borrow the one or more securities, and an owner or beneficial owner of the one or more securities, and wherein the set of instructions, when executed by the one or more processors, further cause the machine to send, to a distributed ledger, a request to record the token and ownership of the token on the distributed ledger.
13 . The non-transitory computer-readable storage medium of claim 12 , wherein the set of instructions, when executed by the one or more processors, further cause the machine to communicate, to the distributed ledger, the transaction transferring the token to the second addressed account associated with the bidder.
14 . The non-transitory computer-readable storage medium of claim 9 , wherein the set of instructions, when executed by the one or more processors, further cause the machine to receive, before generating the token, confirmation from a distributed ledger that the one or more securities is associated with the first addressed account.
15 . The non-transitory computer-readable storage medium of claim 9 , wherein the set of instructions, when executed by the one or more processors, further cause the machine to:
communicate a final auction price to the alternative trading system; and
authorize a resale of the token in a secondary market.
16 . A computerized method comprising:
receiving, at an alternative trading system, an indication of one or more securities available for pre-borrowing through an auction;
holding the auction at the alternative trading system;
matching, by the alternative trading system, the bid with a token identifying the one or more securities, an owner or beneficial owner of the one or more securities, and a bid price for the right to pre-borrow the one or more securities, the token being associated with a first addressed account; and
sending, to a computer system, a request to cryptographically transfer the token into a second addressed account associated with the successful bidder and to record the transfer to a distributed ledger.
17 . The computerized method of claim 16 , further comprising: prior to matching the bid, receiving confirmation from a distributed ledger that the token is associated with the first addressed account.
18 . The computerized method of claim 16 , wherein holding the auction at the alternative trading system comprises receiving one or more bids for a right to pre-borrow the one or more securities, and matching a successful bidder with a bid.
19 . The computerized method of claim 16 , further comprising:
receiving a buy order to purchase the token from a buyer and a sell order to sell the token from the successful bidder;
matching the buy order with the sell order; and
executing a transaction between the buyer and the successful bidder to transfer the token to the buyer, wherein the token is electronically transferred from the successful bidder to the buyer when the successful bidder electronically signs the transaction.
20 . The computerized method of claim 16 , further comprising: communicating the transaction to a distributed ledger for recordation.
21 . The computerized method of claim 16 , wherein the one or more securities comprises at least two different securities to be used to create one or more shares of an exchange traded fund.
22 . A non-transitory, computer-readable storage medium comprising a set of instructions that, when executed by one or more processors, cause a machine to:
receive, at an alternative trading system, an indication of one or more securities available for pre-borrowing through an auction;
hold an auction at the alternative trading system;
match, by the alternative trading system, the bid with a token identifying the one or more securities, an owner or beneficial owner of the one or more securities, and a bid price for the right to pre-borrow the one or more securities, the token being associated with a first addressed account;
send, to a computer system, a request to cryptographically transfer the token into a second addressed account associated with the successful bidder and to record the transfer to a distributed ledger;
receive a buy order to purchase the token from a buyer and a sell order to sell the token from the successful bidder;
match the buy order with the sell order; and
execute a transaction between the buyer and the successful bidder to transfer the token to the buyer, wherein the token is electronically transferred from the successful bidder to the buyer when the successful bidder electronically signs the transaction.
23 . A non-transitory computer-readable storage medium comprising a set of instructions that, when executed by one or more processors, cause a machine to:
receive a request to create shares of exchange traded fund, the exchange traded fund comprising at least two different types of securities;
authorize placement of a right to pre-borrow the at least two different types of securities an at an auction administered by an alternative trading system;
receive, into a first addressed account associated with a token generator, the one or more securities that have been auctioned to a bidder;
in response to receiving the one or more securities into the first addressed account, generate a token indicating one or more borrowing parameters; and
upon receiving notification from the alternative trading system that the token is matched with a bid, cryptographically sign a transaction to transfer the token to a second addressed account associated with the bidder.