4 Months Ago

The French are keen to be seen as the Initial Coin Offering (ICO) hub for Europe, according to AMF, and hope that by reducing the level of tax on sales from 45% to a flat 19% will help encourage ICOs to be launched in France.

Bruno Le Maire, Minister for Economy and Finance, said: “France has every interest in becoming the first major financial centre to propose an ad hoc legislative framework that will allow companies initiating an ICO to demonstrate their seriousness to potential investors”.

In May 2019, the French government enacted “Action Plan for Business Growth and Transformation.” (PACTE), which is a €4.5 billion innovation plan to help stimulate business in France, because in Germany there are over 12,500 small to medium-sized businesses, while in France there are only 5,800. Part of the new PACTE plan is to help businesses with different types of funding and ICOs are seen to be part of the solution. Hence the French Government’s more supportive stance towards ICOs.

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Blockstack has been given the green light from the Securities Exchange Commission (SEC), in America, to proceed with its Initial Coin Offerings (ICOs) under the Reg A+ regulations.

Reg A+ is as an alternative to an Initial Public Offering (IPOs), allowing businesses that have a shorter trading history a way to raise capital, with fewer disclosure requirements than a typical IPO. Many of these mini-IPOs have not performed well and some have been dogged by concerns over fraud, prompting both Nasdaq and the New York Stock Exchange (NSE) to raise their listing requirements for Reg A+ companies.

However, Blockstack is being heralded as the first approval from the SEC since it started it’s “crackdown” on Cryptocurrencies, in particular, ICOs, as many of the ICOs were perceived as being securities by the regulator. This is significant as it sets a precedent for other firms that wish to raise capital in the USA using Reg A+ regulations i.e. obtaining investments from non accredited investors – the general public. Blockstack has used the SEC approval, and in doing so, has raised $28 million via the sale of its digital token. Approval from the SEC did not come without a significant cost for Blockstack, as it spent $2 million to get approval for its ICO.

Blockstack’s achievement to gain permission from the SEC could prove to be an inflexion point for Cryptocurrencies, but investors will still need to be vigilant. However, are we now going to see other firms using this route to raise capital and get listed on Nasdaq or the NSE, as opposed to the various new Digital Asset exchanges currently being established?

 

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6 Months Ago

The American Securities Exchange Commission (SEC) is not making the US a Crypto-friendly jurisdiction for businesses looking to raise capital, as it turns its attention to various companies which have carried out Initial Coin Offerings (ICOs).

The SEC has already taken action against a variety of companies, a list of which can be found on its website Cyber enforcement actions. 


This week the Canadian social media site, Kik, that targets teenagers, carried out an ICO and claimed that it has spent over $5 million to defend itself against the SEC. Kik has argued that it has not broken US securities regulations, as it did not issue security when it launched an ICO and raised nearly $100 million. 

In December 2018, Basis, which was a stablecoin and had raised over $130 million, closed down and handed back money to investors, which it was able to do as it was holding mainly US$ as this is what it was pegged/linked to. However, this is not an option for many of the ICOs that were funded by people swapping Bitcoin and/or Ethereum for tokens, as the price of Bitcoin and Ethereum has fallen significantly since some of these ICOs were launched. One of the leading authors on Blockchain, Alex Tapscott, has been fined this week by the SEC. Tapscott had to relinquish a potential $2million profit he was due from Next Block Capital for allegedly potentially misleading investors, as well as being personally fined $25,000. 

The SEC issued what has been reported as the first ICO enforcement action against a company that has, in effect, “whistle blown” on itself. The company concerned is called Gladius Network LLC, and carried out an ICO in 2017 without prior registration with the SEC. Despite the SEC releasing guidance on ICOs, which some had hoped would clarify the regulators' stance, others fear that the guidance highlights possible causes of concern for a number of firms that have already carried out ICOs, and may indeed discourage companies from promoting ICOs to investors in the USA. 


The SEC has already taken action against people endorsing/seen as promoting ICOs, by bringing charges against professional boxer Floyd Mayweather Jr and music producer Khaled Khaled (known as DJ Khaled), for failing to disclose payments they received for promoting an ICO they were involved with. 

The SEC is casting its regulatory net further (and remember, unlike the FCA in the UK, the SEC sometimes takes retrospective action) to target advisors which helped organisations launch ICOs, or those that may prove to have manipulated the price of certain tokens. While this may be uncomfortable for some existing parties, it hopefully will deter others from breaking the law and in time, help to improve investors and more importantly institutions’
confidence in Digital Assets. 


Despite the SEC action, it has not stopped some companies like Coinbase from successfully signing up institutions for its custody service which now, after just 1 year, has over $1 billion under custody.

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Initial Coin Offering (ICOs) have been used to raise capital by over 5,400 organisations - the largest amount of money being generated was EOS, that reportedly raised $4.3 Billion followed by Telegram with $1.7 Billion, so it is not hard to see why ICOs have attracted so much attention globally.

Unfortunately, it would seem that a number of ICOs are potentially fraudulent, with some estimates saying that over $500 million has been raised for questionable/phony projects. This type of crowdfunding is being replaced by Initial Exchange Offerings (IEOs), which in many ways are very similar to an ICO. The difference is that an IEO is launched and managed by a Digital Exchange, instead of the organisation that is raising capital, itself, carrying out the marketing and distribution of the token. The exchange typically conducts due diligence on the token to be issued and holds and sells the tokens on behalf of the project team. The buyers of the IEO are existing clients of the Digital Exchange, and while this means that there are considerable savings in terms of marketing and promotional costs, many of the exchanges that offer IEOs are charging companies to have access to their distribution capabilities.

It is ironic that ICOs offered the ability for anyone to get access to the potential profits of a token rising in value in a highly decentralised manner. IEOs seem to be moving back to a more centralised model, where investors will need to “sign up” to particular exchanges to get access to individual IEOs and be subject to compliance and regulation. This more centralised style could appeal to regulators, as they may impose regulations on exchanges issuing IEOs and, in effect, treat them like a Nominated Adviser (NOMAD) or a corporate broker.

We are starting to see more asset-backed tokens i.e. Security Token Offerings (STOs) that offer the ability to trade property, commodities, publicly quoted and private shares, and bonds. The institutions that are more likely to buy these STOs ought to draw comfort from this enhanced level of regulation that IEOs may bring.

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https://blokt.com/guides/what-is-an-ieo-initial...-explained

7 Months Ago

In 2014, Mastercoin launched the first Initial Coin Offering (ICO).

It took nearly three years for this capital-raising mechanism to really take off, which subsequently created over 5,000 tokens raising over $22 Billion on a global basis.

As regulators turned their attention to ICOs, arguing that many of them ought to be treated as securities attention has Increasingly focused on the development of Security Tokens (STOs).

STOs are often asset-backed and are subject to security regulations in the jurisdictions in which they are launched and marketed. Making global offerings onerous and practically impossible.

STOs are usually backed/pegged/linked to an asset, examples include private or publicly traded shares, bonds, property (residential and commercial), commodities (gold diamonds), foreign exchange ($, Yen, Euro, £) and even exotic investments like wine, violins, art and other collectables.

STOs, being Digital Assets, mean that they can be listed on Digital Exchanges, which in turn enables them to be traded 24//7 as well as enabling enables smaller investors to buy and sell these assets.

Historically some of these assets, such as real estate and collectables, have proved to be illiquid, and the preserve of the wealthy and institutional investors. However, STOs ought to be able to widen the number of investors who can gain exposure to these previously illiquid assets in the future.

More recently we have seen organisations that want to raise capital by issuing tokens using one of the 300 digital exchanges to launch Initial Exchange Offerings (IEOs). These IEOs are very similar to an ICO, but by being listed on an exchange hopefully have greater liquidity.

Potentially they offer investors a degree of comfort because a third-party (the exchange they are to be listed on), has carried out a degree of due diligence. If the token meets all the tests - including that the company that is creating the it is not intending to use any capital raised to build its infrastructure, IT, or platform etc. it may be classed as an exchange or utility token, so outside of the regulations that capture STOs.

Some exchanges have decided to call their IEOs Direct Premium Offerings (DPOs), usually designed to offer investors access to a cryptocurrency at a discount to the market price. In traditional stock exchanges these are called “rights issues”.

More recently we’re seeing Token Curated Registries (TCR), which are designed to replace centralised lists, eg. a list of the top ten hotels or restaurants in a City. TCR is like an incentivised voting game that creates lists which are maintained by the people who use them. Users collectively vote (using tokens) to decide which submissions are valid, which should be included in the list, and where they will be ranked.All of the above typically use Blockchain technology as part of the process of bringing a company to a wider audience, apart from Direct offers, which simply look at raising capital (much like an Initial Placing Offer (IPO)) but do so without the costly underwriting fees of investment banks.

As Slack have announced they are to launch a Direct Offer, will Pinterest, Zoom, Uber or AirBnb also use Direct...


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https://haseebawan.com/ieo-initial-exchange-off...iled-guide

8 Months Ago

The Securities Exchange Commission (SEC) in the US has told a company called TurnKey Jets (TKJ), that it will not be taking enforcement action for its Initial Coin Offering (ICO), provided TKJ complies with certain, self-imposed,  restrictions.

These include: TKJ will not use any of the capital it raised to build its platform, and the tokens it issues cannot be traded on an external exchange/platform, only held in a TKJ wallet. If clients wish to sell tokens, they can only sell them to TKJ, and it has to be at a discount to the price at which they received them.

It would appear that the SEC is ensuring that there will be no opportunity to profit from holding a TKJ token. Moreover, it is helpful that the SEC has recognised there is a place for utility tokens.

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https://www.ccn.com/crypto-win-sec-admits-not-a...securities
This was the message reported from China this week as they confirmed that they are cracking down on organisations raising capital via Initial Coin Offerings (ICOs) and Security Token Offerings (STOs).

It was only in December 2018 that Beijing’s Municipal Bureau of Finance said “The ICO (initial coin offering) model is getting left behind for a new concept called STO. I want to issue a warning to anyone considering running an STO in Beijing,” Xuewen said. “Don’t do it in Beijing – it is illegal. You can only engage in such activities with the approval from the government.” Government approval, what does this mean?

This is at odds with recent promotion of a
book on Crypto assets on a Chinese state-run TV last month that reportedly has an audience of one billion. The presenters telling viewers that Crypto assets could be one of the best investments they could ever make.

It was only in December 2018 that there were rumours that the People’s Bank of China was looking at ways to create its own cryptocurrency. It apparently thought this type of digital asset could replace Bitcoin and perhaps even the U.S. Dollar.
Given these conflicting messages, we spoke to GlenBit in Edinburgh that owns a Digital Asset platform powered by Japanese technology, as they have close contacts in China. GlenBit looked at various Chinese government websites and national publications and could find no mention of this ICO/STO ban. They did find an article on a well known Chinese website that follows Crypto news, called ‘Bi Hu’, which using Google translated this article https://bihu.com/article/1601678341 which said “After the ICO foam was broken, many countries began to ban ICO… Thus, a new form of new currency, STO, was born that will become the main mode to raise money for Chinese blockchain project”

Time will tell the actual stance the Chinese are taking…


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https://www.investinblockchain.com/china-says-i...ctivities/
The Blockchain Education Network (BEN) now has over three thousand students, in sixty countries - established to slake the thirst for more information about Blockchain.

Students, and for that matter governments, are increasingly looking beyond the hype of ICOs of using Blockchain and Cryptocurrencies to make money, and are looking at how the technology can impact society in a positive manner.

BEN is a non-profit organisation for students, whose aim is to help build a world that is more open by encouraging better technical skills and understanding around Blockchain technology. Students who’ve been involved in BEN have already gone on to help build successful Digital business likeAugur, one of the first decentralised apps using the Ethereum Blockchain, currently worth $1Billion.

Global firms are also using Blockchain for education reasons. PWC has developed Smart Credentials using Blockchain to record educational qualifications that can be stored and verified, so reducing the time it takes for them to check and screen candidates. Recording such personal data needs to be done with care, especially in the light of GDPR regulations. Which is why it is public Blockchains are unlikely to be used rather than permissioned ones.


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https://www.forbes.com/sites/alisonmccauley/201...7c4bb76f04
The German government has issued a paper laying out how it wishes to encourage the spread of Blockchain businesses and “electronic instruments “ i.e. Digital Assets.

They want to ensure that investors are protected while expanding Germany’s global role - so that they’re not left behind in these sectors. 
Interestingly, German firm Naga was the first publicly listed company in Europe to carry out an Initial Coin Offering ( ICO), in 2017 when it raised Euros 40m from over 50,000 investors.
This announcement from the German government comes hot on the heels of its financial regulator, BaFin confirming that they have approved BitBond to issue Digital Bonds. This will be Europe’s first fully regulated Security Token. Bitbond has already issued $15m of loans and its platform has over 165,000 registered users. So like Naga seems to be attracting considerable interest from investors. 
The issuing of bonds using Blockchain technology is believed to be able to reduce the associated costs by over 60% so ought to enable smaller companies to be able to offer bonds creating an alternative source of finance. 
If issuing bonds using Blockchain technology is successful in reducing costs and allowing SMEs to issues bonds, then the Peer To Peer (P2P) lending market could face new competition. The P2P market is expected to grow to nearly $900 Billion by 2024. 

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https://www.devdiscourse.com/article/internatio...egulations

9 Months Ago

ICOs are still being used as a method to fund small businesses as demonstrated by Fetch.AI who attracted over 19,860 people register to buy and successfully raised $6million from 2,758 investors in 10 seconds.

Fetch.AI based in Cambridge in UK said they were “aiming to get as many people involved as possible so they limited the maximum number of tokens one could buy to only $3,000”. It is likely we will see a lot more firms using Digital Assets to raise relatively small amounts of capital; from platforms like Binance and Token Market

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https://cryptonomist.ch/en/2019/02/15/binance-l...oken-sale/
Momentum for the issuing of Security Tokens is gathering pace in Europe with a Blockchain powered company called Bitbond, announcing it now has regulatory approval from BaFin (German Federal Financial Supervisory Authority) to launch a bond to raise up to Euros 100million using the Stellar Blockchain.

In contrast to ICOs, the securities prospectus for token-based bonds gives investors transparency and comprehensively documents their rights and the terms of the offer. The bond is subject to BaFin’s regulatory control. Bitbond has been approved as an asset broker under the German Banking Act for its Blockchain-based lending business and is the first financial services institution of this type to be supervised by BaFin.

We have already seen BBVA the Spanish bank using Blockchain technology to issue a bond, as have NIVURA in London.

It is thought that issuing bonds on a Blockchain could reduce the issue costs by 50% to 70% so potentially small to medium size companies could start using the bonds to raise capital on Blockchains.


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https://coingape.com/bitbond-becomes-first-regu...tification

10 Months Ago

Having raised over $20 billion and seen the market capitalization of tokens rise to over $800Billion and then fall to $200Billion many people are understandably nervous about this asset.

Now STOs are predicted to dominate crowdfunding to help business raise capital as they can offer fractionalization ownership i.e. many people can own an asset like a property, a car, a work of art. It is claimed that an STO is cheaper to do compared to an Initial Public Offering (IPO). The potential for increased liquidity and they will be governed by stronger regulation as STOs can be traded on regulated exchanges to giving comfort to traditional fund managers and compliance staff.

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https://blockgeeks.com/guides/security-tokens-explained/
One of the most successful ICOs last year, that within six months of doing an ICO was valued at over $1billion, is to fight the US Securities Exchange Commission (SEC) as to whether it’s token Kin is not a security.

The SEC believes that Kik has broken US security laws by issuing security. The firm argues that the tokens issued aren’t security tokens but a utility token as it has hundreds of thousands of people have been using Kin as a currency to buy goods and services. The firm plans to formally challenge the SEC’s position. This video is the companies vision for Kin (watch here). To see Kik’s CEO version of why he thinks the SEC has got is wrong read here.

This challenge is important as it will help to clarify and help determine what influence the SEC has and what is and what is not a security token.


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https://bitnewstoday.com/news/kik-interactive-k...-to-court/
Security tokens address the concerns of many investors as they are typically backed by physical assets and therefore ought not to be as volatile as the cryptocurrencies created by ICOs.

According to Bussiness Korea, the country’s leading blockchain research centres, Chain Partners’ CP Research and Coinone Research Centre, have identified STOs as the next big thing for the crypto industry.

CP Research added that they provide a solution for assets that are difficult to liquidate such as real estate or art. It said that 2019 will see the establishment of an STO infrastructure and the market will grow to an estimated $2 trillion by 2030.


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http://www.businesskorea.co.kr/news/articleView...dxno=28473
The European Securities and Markets Authority (ESMA) has just published its “Advice” on “Initial Coin Offerings and Crypto-Assets.”

In the past, ESMA has issued several warnings regarding crypto-assets and virtual currencies. The Advice outlines ESMA’s position on the issues that exist in the rules within ESMA’s remit when “crypto-assets qualify as financial instruments and the risks that are left unaddressed when crypto-assets do not qualify as financial instruments.” While not mentioning any country by name, France is the largest EU member that is in the process of creating rules that apply to initial coin offerings (ICOs).

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https://documentcloud.adobe.com/link/track?uri=...061952368b

11 Months Ago



Co-founder of TeamBlockchain, Thomas Power with over 30 years of experience building online digital communities believes that it is just time before the FANGs - Facebook, Amazon, Netflix, Google start gobbling up the leading crypto players. Just like Dotcom, there will be a handful of winner form the 5,000 ICOs we have seen to date as they give way to the more compliant institutional friendly Security Tokens.

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Source: Why crypto will be eaten by Facebook, Google, Amazon and Apple