Blockchain startup Swarm announced Wednesday that it was launching new "equity tokens" that would represent equity in notable blockchain startups like Coinbase and Ripple – but those companies have pushed back swiftly against the idea.
The "blockchain for private equity" company published a blog post describing its new token project, with chief executive Philipp Pieper explaining in a statement that the tokens "democratize investing" and allow "any Swarm investor [to] hold equity in some of today's most prominent tech startups."
In a statement, a spokesperson for Swarm told CoinDesk that the "tokens are company equity either from vested options or from venture capitalists," explaining that the equity comes from "approved secondary market transactions to acquire vested employee shares, or from venture capitalists who have directly acquired equity from these companies."
Yet when reached for comment, representatives for Coinbase and Ripple struck sharply critical tones – and in the case of Coinbase, a cease-and-desist has already been sent, according to Swarm, resulting in an updated announcement that removed all references to Coinbase.
"As a private company, Coinbase does not allow trading of stock on secondary markets for a variety of reasons, including the fact that there is not full and equal information available to the market. We will take appropriate action if we find people have sold Coinbase shares in violation of our agreements not to do so," Coinbase told CoinDesk in a statement.
Though there's no indication that a cease-and-desist letter was sent by them, a representative for Ripple issued a similar rebuke.
"We have never spoken to Swarm, don't have a record of them purchasing Ripple equity and would not have approved a purchase for this purpose," the rep said.
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