Securitize: How One Platform Became the Infrastructure for BlackRock, KKR, and Apollo's Tokenization Strategies

Executive Briefing

Securitize has emerged as the dominant compliance infrastructure provider for institutional tokenization in the United States. Its combination of SEC-registered transfer agent, Alternative Trading System, and broker-dealer licenses — assembled over six years of regulatory work — has positioned the company as the preferred partner for BlackRock, KKR, Apollo, and Hamilton Lane. When BlackRock launched BUIDL in March 2024, it chose Securitize not because of technology but because of regulatory architecture. Understanding Securitize means understanding how institutional tokenization actually works at the compliance layer.

The Integrated Compliance Stack

The central insight of Securitize’s business model is that digital asset securities require three separate regulatory registrations to function legally in the United States — and that assembling all three creates a defensible moat that capital-constrained competitors cannot easily replicate.

Transfer Agent Registration. Securitize Transfer Agent, LLC is registered with the SEC as a transfer agent under Section 17A of the Securities Exchange Act of 1934. Transfer agents maintain the official record of who owns securities. For tokenized funds, the SEC’s position — crystallized through Franklin Templeton’s FOBXX approval and subsequent guidance — is that blockchain records can serve as the official register, but only when maintained by a registered transfer agent. Securitize’s transfer agent registration gives its clients a legally defensible ownership record that satisfies both SEC requirements and investor protection standards.

Alternative Trading System. Securitize Markets operates an ATS registered with FINRA and the SEC. This matters enormously for secondary liquidity. Without an ATS, tokenized security holders have no legal venue to trade their positions between permissioned participants. The Securitize ATS creates a regulated secondary market for tokenized securities — the foundation for the liquidity premium that makes tokenization attractive to institutional issuers and their investors.

Broker-Dealer License. The broker-dealer registration completes the compliance trifecta. It allows Securitize to facilitate securities transactions, collect commissions on secondary trades, and operate within the full framework of FINRA conduct rules. Combined with the ATS, the broker-dealer license means Securitize can run an end-to-end regulated marketplace — from primary issuance through secondary trading — without relying on third-party licensed intermediaries.

The BUIDL Partnership: BlackRock’s Infrastructure Choice

BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), launched in March 2024 on Ethereum, is the flagship product demonstrating Securitize’s institutional reach. BUIDL holds short-duration US Treasuries and repurchase agreements, targeting institutional investors seeking tokenized cash equivalents with on-chain yield distribution.

BlackRock chose Securitize as transfer agent and placement agent for BUIDL after an extensive due diligence process. The selection criteria, according to people familiar with the process, centered on three factors: regulatory registration completeness, existing relationships with institutional custodians (Coinbase Prime, BNY Mellon, BitGo), and the ability to manage KYC/AML compliance for institutional counterparties programmatically.

The $47 million strategic investment BlackRock made in Securitize in August 2024 should be understood as infrastructure capital, not financial speculation. BlackRock was purchasing preferred access to a regulated compliance stack it could not build faster on its own. The investment gave BlackRock an observer seat on Securitize’s board and preferential commercial terms — a model similar to how asset managers have historically invested in fintech infrastructure to secure platform advantages.

BUIDL grew to $500M+ in assets under management within six months of launch — the fastest institutional tokenization product launch in US history. The growth was driven by DeFi protocols (Ondo Finance, Superstate) using BUIDL as a yield-bearing collateral asset, demonstrating that regulated institutional products can interact with decentralized protocols when compliance infrastructure is solid.

KKR, Apollo, and the Alternative Assets Strategy

Securitize’s partnership portfolio extends well beyond BlackRock to the alternative asset management community. KKR’s Health Care Strategic Growth Fund II became the first major PE fund to offer tokenized access to its institutional fund structure on Avalanche, with Securitize serving as transfer agent. Apollo’s Apollo Diversified Credit fund similarly uses Securitize infrastructure for its tokenized share class.

The logic for alternative asset managers is distinct from the money market fund use case. For KKR and Apollo, tokenization solves three problems simultaneously:

Minimum investment reduction. Traditional PE funds carry $250,000-$5,000,000 minimums due to administrative cost per investor. Tokenized share classes can reduce minimums to $10,000-$20,000 by automating investor onboarding, distributions, and capital call processing through smart contracts. Securitize handles all of this within its compliance architecture.

Secondary liquidity facilitation. PE fund interests are traditionally illiquid for 7-10 year fund lives. Securitize’s ATS creates a permissioned venue where accredited investors can trade tokenized PE interests — not true public market liquidity, but meaningfully better than the current secondary market (which runs through slow, expensive transfer agent processes and ROFR procedures).

Investor reporting automation. Smart contracts on Securitize’s platform automate K-1 distributions, NAV reporting, and capital account statements. The operational cost reduction for large PE fund administrators is material.

Carlos Domingo’s Regulatory Strategy

Carlos Domingo, Securitize’s CEO and co-founder, built the company’s regulatory strategy around a core insight: institutional asset managers would not tokenize assets unless the legal and compliance infrastructure mirrored the existing securities regulatory framework exactly. There could be no regulatory ambiguity.

This led to a deliberate choice to avoid the “crypto-native” regulatory posture of many competitors. Securitize does not argue that tokens are a new asset class requiring new regulatory frameworks. Instead, it positions tokenized securities as securities — regulated under the Securities Act, the Exchange Act, and the Investment Company Act — that happen to use blockchain as their transfer agent record system.

The strategy required patience. Securitize obtained its transfer agent registration in 2019, its ATS in 2021, and its broker-dealer in 2022 — each requiring months of SEC review, examination, and negotiation. The three-year buildout of regulatory registrations means that competitors seeking to enter the space in 2024-2025 face a multi-year lag in regulatory standing that cannot be shortcut with capital.

Domingo has been explicit in public forums that Securitize views its compliance infrastructure as its primary competitive advantage. The technology — blockchain tokenization, smart contract automation — is available to any well-capitalized competitor. The regulatory licenses, the institutional relationships built during SEC examination processes, and the track record of managing compliant tokenized offerings are not.

The 40 Act Registered Fund Wrapper

A critical dimension of Securitize’s strategy is its focus on Investment Company Act of 1940 (“40 Act”) registered fund structures. BUIDL is not registered under the 40 Act — it relies on exemptions — but several Securitize-platform products use registered fund wrappers.

The registered fund structure matters for two reasons. First, 40 Act funds can be sold to non-accredited investors (subject to suitability requirements), dramatically expanding the addressable market. Second, registered fund status provides investor protections — independent board oversight, standardized disclosure, redemption rights — that institutional investors increasingly demand.

Securitize has developed expertise in structuring tokenized share classes within existing 40 Act fund complexes. Rather than creating new funds, the approach adds a blockchain-settled share class to an existing registered fund. The existing regulatory approvals, compliance infrastructure, and audit relationships remain in place. Only the settlement mechanism changes.

This wrapper strategy addresses the most common concern among institutional investors considering tokenized exposure: regulatory risk. An investment in a 40 Act registered fund’s tokenized share class carries the same investor protections as a traditional mutual fund share — blockchain settlement is an operational detail, not a regulatory novelty.

Secondary Liquidity: The Securitize Markets ATS

Secondary liquidity is the unsolved problem in institutional tokenization. Securitize Markets — the ATS subsidiary — represents the company’s attempt to build the answer.

The Securitize Markets ATS operates as a permissioned marketplace. Only investors who have completed Securitize’s KYC/AML onboarding and hold a verified digital wallet can participate. This restriction maintains compliance with securities laws — all trades are between accredited investors or qualified purchasers, depending on the product — while creating a genuine secondary market.

Volume on Securitize Markets remains modest relative to traditional secondary markets for PE and private credit. The ATS processed an estimated $50-80M in secondary volume in 2024, compared to tens of billions on traditional PE secondary markets. But the trajectory is upward, and the ATS’s value proposition improves as the volume of primary issuances on the platform grows. A larger pool of tokenized assets creates more natural secondary market participants, which increases ATS liquidity, which makes primary issuance more attractive — a flywheel Securitize is actively cultivating.

Exhibit: Securitize Platform Partnerships and Asset Classes

Competitive Landscape and Threats

Securitize’s integrated compliance stack creates a durable advantage — but not an impenetrable one. Three categories of competitive threat merit monitoring:

TradFi infrastructure providers building in. DTCC, BNY Mellon, and State Street have the regulatory registrations (as transfer agents and custodians) and the institutional relationships to compete directly with Securitize. The post-SAB 121 environment creates conditions for bank custody subsidiaries to expand into tokenized transfer agent services. None has moved aggressively yet, but the capability exists.

Crypto-native platforms pursuing regulatory licenses. Coinbase, Kraken, and others are pursuing transfer agent registrations and ATS approvals. The SEC review timelines are long, but a well-capitalized exchange obtaining transfer agent status would be a significant competitive development.

Protocol-native compliance solutions. Projects like Ondo Finance and Centrifuge are developing their own onboarding and compliance layers that reduce (though cannot eliminate) dependence on platforms like Securitize. If DeFi-native compliance becomes sufficiently robust, institutional issuers may choose direct protocol deployment with their own transfer agent registrations.

None of these threats is imminent. Securitize’s head start, its client relationships, and the compounding nature of institutional trust in compliance infrastructure providers give it a 3-5 year runway as the default institutional tokenization platform. The strategic question for competitors is not whether Securitize can be matched on technology — it can — but whether the regulatory and relationship gap can be closed faster than Securitize’s AUM grows.

Strategic Implications

For institutional investors, Securitize’s position as default tokenization infrastructure provider creates a de facto standard-setting role. Products built on Securitize share common compliance architecture, wallet standards, and secondary market access. As the platform grows, the network effects for institutional investors increase — more issuers, more liquidity, more integrated reporting.

For asset managers considering tokenization, the build-vs-buy question increasingly resolves in favor of partnering with Securitize. Building equivalent regulatory infrastructure requires 3+ years and tens of millions in legal and compliance investment, with uncertain SEC approval timelines. Securitize’s commercial terms — a combination of platform fees and ATS trading revenue — are cheaper than the alternative for all but the largest issuers with the longest time horizons.

For regulators and policymakers, Securitize represents the model that SEC staff has implicitly endorsed through its approval of BUIDL and other platform products: securities law infrastructure ported onto blockchain rails, not a novel regulatory framework. The implications for future tokenization regulation should be understood through this lens — the SEC is more likely to expand guidance within the existing framework than to create a blockchain-specific securities regime.