UAE based Lombard Systems raises $4 million for locked tokenized assets as collateral
The UAE and US based Lombard Systems, previously known as SemiLiquid/PCP, the creator and maintainer of the Delivery-versus-Lock (DvL) standard, a technical and legal framework, that allows financial institutions to use tokenized and digital assets as collateral without moving them out of their original securities accounts, has raised $4 million across pre-seed and seed funding rounds, led by Ethereal Ventures, with participation from Alps Capital, First Commit Capital, Veris Ventures, Atka and others.
As per the announcement, the funding will support institutional adoption of DvL, including the completion of legal opinions in the United States, England, Wales and across five further jurisdictions, adoption by additional Control Locations, expansion of institutional integrations and growth of the Lombard Systems team.
The infrastructure supporting collateralized financing has largely remained unchanged. Traditional financing arrangements typically require borrowers to transfer collateral to lenders or third-party agents, with bespoke documentation and slow enforcement on default.
Lombard Systems developed DvL, allowing assets to remain locked in their name at a custodian, broker-dealer or transfer agent, while the lender receives a legally enforceable security interest evidenced by a cryptographically signed Credit Receipt. The borrower retains beneficial ownership throughout, with only the amount owed delivered to the lender on a validated default, under pre-agreed enforcement terms.
“Tokenized stocks and funds are scaling now. Origination and enforcement of loans against tokenized collateral have to be as fast as the assets can move, while staying grounded in existing securities law,” said Rico van der Veen, Co-Founder and CEO of Lombard Systems. “DvL keeps assets in their existing securities accounts and gives lenders enforceable rights, with enforcement agreed upfront. That is what turns tokenized assets into usable collateral.”
The investment comes as Lombard Systems advances toward its first institutional deployments, with additional integrations involving banks, broker-dealers and transfer agents planned in the coming months.
“Tokenization is creating real opportunities for financial institutions in trading and settlement, with significant potential to extend those benefits into financing,” said Eeshaan Sachatheva, Co-CIO at Ethereal Ventures. “Lombard Systems is building a critical piece of that infrastructure with DvL, a standardized framework for financing tokenized assets.”
DvL supports Lombard and margin loans, financing against tokenized money market funds and stocks, securities lending by pledge and initial margin for uncleared derivatives under existing ISDA Master Agreements. Institutions can deploy DvL on a white-label basis within their existing systems, directly or through technology partners.
