Groovy Company’s beta crypto assets will convert into SEC-aligned, board-authorized equity tokens in a landmark shift for compliant blockchain finance
A major step toward regulated digital ownership is set to arrive on February 14, 2026, as Groovy Company, Inc., operating as OTCM Protocol, prepares to launch a sweeping token conversion that will move its early-stage crypto assets into a fully compliant, issuer-backed security token structure.
The upcoming swap marks one of the most concrete transitions yet from experimental “beta” blockchain tokens into regulated digital securities designed to function as real equity under U.S. securities law—a development closely watched by fintech, digital infrastructure, and compliance-driven business leaders across New Jersey’s rapidly expanding innovation sector.
The event will allow holders of three existing beta tokens—$GROO, $MSPC, and $GRLF—to convert their assets into newly issued regulated security tokens under a one-to-one exchange model. Each eligible token will be swapped at a 1:1 ratio, preserving holders’ positions while replacing the underlying token architecture with a structure designed for long-term regulatory certainty.
The eligible assets include $GROO, associated with Groovy Company itself, $MSPC issued by MSPC Holdings, and $GRLF, which represents a participating beta partner within the OTCM Protocol ecosystem.
Unlike many previous token migrations that focused solely on technology upgrades, this conversion is centered on regulatory alignment and formal corporate authorization.
The new tokens will be issued using the SPL Token-2022 standard—often referred to in industry circles as the ST22 framework—on the Solana blockchain. This standard introduces programmable “transfer hooks,” a built-in compliance layer that allows issuers to enforce regulatory requirements directly at the token level.
Those hooks enable real-time rule enforcement for transfers, including restrictions related to investor eligibility, jurisdictional limitations, holding periods, and corporate actions. In practice, this means the token itself becomes a compliance instrument rather than a simple digital wrapper.
For issuers and investors alike, this design represents a fundamental shift in how digital assets can satisfy federal securities obligations without relying exclusively on off-chain monitoring systems.
The February 14 swap is also structured to reflect newly clarified federal guidance issued at the end of January 2026. Under that guidance, the new tokens fall into what regulators classify as Category 1 issuer-sponsored digital securities.
Category 1 classification carries a critical distinction: the tokens are formally authorized by the issuer’s board of directors and are designed to represent actual ownership interests, rather than synthetic or derivative claims.
In this case, the newly issued digital securities will represent equity tied to Series M Preferred shares. Those underlying shares will not be held directly by token holders on personal ledgers. Instead, custody of the registered equity will be maintained by Empire Stock Transfer, an SEC-registered transfer agent responsible for official shareholder records, corporate actions, and regulatory reporting.
This structure aligns the digital layer with the traditional securities infrastructure that governs public and private company ownership in the United States.
For investors, the shift introduces a level of institutional protection that early-stage blockchain projects historically lacked. The use of a regulated transfer agent establishes a verifiable shareholder registry, formal reconciliation processes, and legal recognition of ownership in the event of disputes, audits, or corporate transactions.
OTCM Protocol officials describe the initiative as the formal graduation of the platform’s early beta ecosystem into a fully regulated capital structure.
The original beta tokens were designed to test infrastructure, liquidity mechanisms, and digital distribution models. While they functioned as placeholders for ownership and participation, they were not built to satisfy the full scope of federal securities compliance.
The February conversion is intended to close that gap.
By pairing on-chain compliance logic with off-chain regulated custody and board-approved issuance, the new token structure is designed to deliver what regulators increasingly expect from digital securities: transparency, traceability, investor protections, and enforceable governance.
For New Jersey’s growing digital asset and fintech community, the move carries broader significance.
The state has steadily positioned itself as a hub for financial services, technology operations, and regulated market infrastructure, particularly along the Princeton–New Brunswick corridor and within emerging innovation districts in North Jersey. Projects that successfully bridge traditional securities regulation with blockchain execution are widely seen as a critical catalyst for attracting institutional capital, enterprise partnerships, and public-sector collaboration.
Industry analysts say compliant digital securities could reshape how private companies raise capital, manage shareholder records, execute corporate actions, and distribute returns—while still operating within the established regulatory framework.
The technical foundation behind the ST22 standard also opens the door to programmable compliance features that go well beyond simple transfer restrictions. Issuers can embed logic related to dividend distribution, voting rights, lock-up periods, and automated reporting triggers—functions that traditionally require multiple intermediaries and reconciliation layers.
For holders of $GROO, $MSPC, and $GRLF, the February 14 event represents a direct conversion of their existing positions into the new regulatory format without dilution or repricing. The 1:1 exchange ratio preserves the original token quantities while replacing the legal and technical structure beneath them.
Participation in the swap will be limited to current holders of the eligible beta tokens, and the newly issued securities will be recognized as issuer-sponsored digital equity rather than utility or experimental tokens.
In a market still recovering from years of regulatory uncertainty and high-profile enforcement actions, the Groovy Company and OTCM Protocol initiative is emerging as a case study in how digital assets can be rebuilt from the ground up to operate as compliant financial instruments rather than speculative technology experiments.
As February approaches, the conversion is expected to draw attention from institutional investors, compliance officers, and infrastructure providers looking for scalable models that integrate blockchain efficiency with U.S. securities law.
For New Jersey’s financial technology landscape, the shift signals something deeper than a token upgrade—it reflects the accelerating convergence between regulated capital markets and next-generation digital infrastructure, a convergence that is rapidly redefining how modern equity can be issued, managed, and owned.
