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A Look at Europe’s Security Token Legislation

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Liechtenstein via TripSavvy

Europe continues to see more counties taking a pro-crypto stance. Countries such as the UK, Switzerland, and Malta, have already made huge strides towards furthering their respective positions in the market. While there are many contributing factors behind these moves, the introduction of security tokens has played a huge roll in these countries decision.

Security tokens allow for the digitization of traditional investments. This method is called tokenization. Tokenized assets are considered more stable than traditional cryptocurrencies by most countries. Currently, security tokens fall under the EU’s MiFIDII regulations.

MiFID II

The EU instituted MiFID II regulations on January 3, 2018. This legislative framework provides investors with added protections. Additionally, MiFID II regulations improve the functionality and efficiency of the market. The legislation is a follow up to the original MiFID (Markets in Financial Directive) regulations which have been in operation since November 2007.

Liechtenstein

The sixth smallest country in the world, Liechtenstein continues to develop their blockchain sector at an impressive rate. Despite being only 62 square miles in total, this tiny country ranks among the highest in terms of GDP per capita. In October 2018, the country released a public draft titled the “National Blockchain Act.”

The document highlighted the counties desire to further their blockchain aspirations. The move was quickly followed by an announcement by the country’s Union Bank AG. Here, the bank described their intention to be the first regulated bank issuing a security token. The bank looks to create a token for interbank activities such as transferring large amounts of funds internationally.

Germany

Germany does not consider cryptocurrencies as financial instruments. In September 2018, the country determined that Bitcoin traders don’t need any licensing and that trading cryptocurrency should remain legal. This was a major ruling in favor of crypto investors. This ruling meant that crypto investors did not need to adhere to Germany’s securities regulations.

Berlin via City Break

Berlin via City Break

In December 2018, Germany’s second largest stock exchange announced plans to launch a crypto token exchange. The Boerse Stuttgart Group partnered with the local Fintech firm SolarisBank to make the project a reality. The exchange’s release date is Q3 2019. According to developers, a variety of cryptocurrencies including utility, security, and exchange tokens will be hosted.

Switzerland

Switzerland has long been a financial epicenter in Europe. Swiss officials are keen on extending their financial influence into the blockchain sector. The country recently opened a blockchain business sector dubbed the Crypto Valley. Here, blockchain startups receive reduced taxes and other benefits provided by the Swiss government.

Aside from financial benefits, Swiss-based blockchain firms benefit greatly from the country’s clear cut blockchain regulations. The Swiss Financial Market Supervisory Authority (FINMA) breaks tokens into four distinct categories. These categories include asset, payment, utility, and hybrid tokens.

Estonia

Estonia was among the first EU members to legalize crypto activities. The country already approved over 900 crypto licenses since changing regulations last year. Those licensed include a variety of crypto businesses such as exchanges, startups,  and blockchain tech firms. Around 400 of the licenses issued belonged to crypto wallet providers according to recent reports.

Estonia managed to go from the poorest country in the EU to a thriving economy through a combination of factors. Tax incentives, a friendly business environment, and easy licensing procedures all contributed to the country’s rise in the blockchain sector. Today, Estonia is one of the most STO friendly countries in the world.

Malta

Malta continues to be a driving crypto force in the region. This country took the crypto reigns through a combination of factors. Malta was the first country in the world to provide a solid regulatory framework for crypto investors and ICOs. The government is pro-active in recruiting new startups to their market.

Today, Malta is one of the best locations in the world to launch your STO. The country already is home to numerous large crypto platforms. The worlds largest crypto exchange by volume, Binance, partnered with the Maltese Stock Exchange (MSX) in September of last year. The two plan to build a new security token exchange within the country in the coming months.

UK

The UK currently does not have crypto regulations in place. The country continues to research the cryptomarket with regulators claiming that it could be years before proper regulatory guidelines can be developed. In March 2018, the countries Crypto assets Taskforce issued a report in which cryptocurrencies were listed in three distinct classes. These classes include security tokens, utility tokens, and exchange tokens.

Currently, the UK crypto debate continues. The British Business Federation Authority (BBFA) released a report in which they detailed how bad regulations would hinder growth in the sector much more than “no regulations at all.” As it stands today, the UK has a strong blockchain community with analysts predicting future growth in this sector.

France

France took a much different approach regarding cryptocurrency firms. The Authorité des Marchés Financiers (AMF) released ICO guidelines last year. The new regulations require all ICOs to provide full transparency regarding their offerings. Companies must define their tokens use prior to approval. This demand is required so that officials can determine what type of token the company plans to issue.

France’s stance on ICOs is mimicked by a plethora of other countries around the globe. By making all ICOs operate in full disclosure, the country managed to simultaneously welcome STOs while reducing the number of ICOs in operation. STOs provide a much safer way for investors to participate in blockchain fundraising raising campaigns.

EU Security Tokens are On the Rise

Now that you have a better understanding of the cryptocurrency regulations currently under development in Europe, it’s easy to see why countries like Malta have invested so much into their blockchain sector.

As the global economy continues along the path of digitization, there is much to be gained for the country able to become the epicenter of this technological revolution. Hopefully, more countries around the globe will realize the importance of these developments and how they affect the future of global economics in major ways. For now, the race is on to see which European country is able to take the lead in the blockchain economy.

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David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including bitcoinlightning.com

Security Token News

REMCO Software to see Security Tokens Listed on LATOKEN

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Upcoming STO

REMCO Software is in the midst of completing a ‘security token offering’. As you may know, this refers to a crowdfunding campaign tailored towards accredited investors. During the offering, investors are able to purchase digital securities in the form of a token, typically representative of equity shares within the issuing company – an efficient merger of traditional and future finance.

Recently, REMCO announced good news, as they have secured an agreement that, once issued, will see their tokens listed for trading on the LATOKEN platform. By providing a flexible listing platform, LATOKEN will enable investors to easily trade between REMCO tokens and FIAT currencies. The ability to do so is expected to result in new-found levels of liquidity, not normally witness when dealing with such assets.

Commentary

In their press release, representatives from both REMCO and LATOKEN spoke on the agreement, and what it means for the industry.

Valentin Preobrazhenskiy, CEO of LATOKEN, stated,

“We are especially pleased to welcome REMCO token in the pool of our future projects. Their business model is both practical and very innovative. It brings a great deal of added value to the industry.”

Peter Ojo, CEO of REMCO Software, stated,

“LATOKEN’s innovative approach appealed to us…There are many crucial steps to getting this business off the ground, and we appreciate reaching this milestone with LATOKEN.”

REMCO Software

REMCO is a young company looking to revolutionize the remittance industry. They intend to do so, by utilizing traits inherent to blockchain technology that will allow for greater transparency and efficiency in finance. They were founded in 2018, and are based out of Laurel, Maryland.

Company operations are currently spearheaded by CEO, Peter Ojo. Under his watch, the company hopes to successfully complete a security token offering, which will facilitate their envisioned future.

LATOKEN

LATOKEN refers to ‘Liquid Assets Platform’. Founded in 2017, CEO, Valentin Preobrazhenskiy, has guided the platform into becoming a promising player within the industry. As their name implies, the platform aims to bring liquidity to a variety of assets.  Through their FIAT gateways, they have now begun to attract the attention of companies, such as REMCO.

In Other News

While this is the first time that each of these companies have graced our headlines, there is no shortage of news in the industry. Here is a brief look at a few articles detailing recent partnerships, and industry developments.

How Lition Utilizes Blockchain for a Greener Future

Elevated Returns and Securitize to Utilize Tezos for digital Securities

Wyoming Moves to Allow Tokenization of Corporate Stocks

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Security Token News

Magic BlockchainQA to Collaborate with Securitize

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Cross-Collaboration

It was recently announced by Magic Blockchain QA, that they have established a working relationship with industry leader, Securitize.

The nature of this relationship will see each company refer clients to the other. They are essentially building bridges, which will provide clients with a greater variety of integrates services.

In addition to client referrals, this relationship will see Magic BlockchainQA offer their quality and analysis services for the DS-Protocol. This protocol was custom built by Securitize to fit the needs of the digital securities industry. Through its implementation, clients are able to sell, create, issue, and manage digital securities backed by a variety of assets.

This development is reminiscent of one that occurred just recently. At that time, we reported on a similar relationship between DESICO and Securitize. As stated, these types of relationships are key to ensuring steady growth in the relationship. At this stage in the game, what is good for one player is good for all players.

Commentary

Anuraj Soni, President of Magic Blockchain QA, took the time to address this development.

“The Securitize platform has gained significant prominence in last few years and this partnership allows Magic to train its consultants on this platform enabling Securitize clients easy access to a pool of Magic consultants who can help with the seamless adoption of this platform.”

Magic BlockchainQA

Magic BlockchainQA touts themselves as the world’s first quality and analysis services dedicated to blockchain applications. Check out the following video to learn more about why this is an important and needed service.

This young company was founded in 2018, and is based out of New York City. Company operations are overseen by President Anuraj Soni. He boasts years of experience in leadership roles at companies like Bank of America, GENPACT, and other.

To date, Magic BlockchainQA has established partnerships with not only Securitize, but MythX as well.

Securitize

Securitize is one of the leading companies in the rapidly developing digital securities sector. They operate out of San Francisco, under the watch of CEO, Carlos Domingo.

Since commencing operations in 2017, Securitize has developed a tech-stack that allows for them to offers clients end-to-end tokenization services. These services range from token creation, to issuance, and lifetime management post distribution.

In Other News

To learn more about the companies discussed here today, make sure to check out a few of the articles below. While this is the first time we have detailed Magic Blockchain, Securitize is a regular on our newsfeed.

Securitize combines forces with DESICO

Modulus to Implement Securitize technologies

Securitize chosen to participate in IBM Blockchain Accelerator

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Security Token News

Blockchain Identity Firm WISeCoin Announces STO

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WISeKey Announces STO

The Swiss-based cybersecurity firm, WISeCoin announced plans to host an STO in Q2 2019. The announcement has captured the attention of analysts and follows the receival of a “no-Action Letter” from the Swiss Financial Supervisory Authority (FINMA). The move marks another step forward for the Swiss security token market.

WISeCoin is a subsidiary of WISeKey. WISeKey created the WISeCoin platform to furhte3r pursue their blockchain identity strategy. Speaking on the decision to host an STO, WISeKey CEO, Carlos Moreira, discussed how his platform utilizes a wide-range of “blockchain enabled microchips” to provide clients with a customizable identification system. He also touched on the importance of increasing your digital identification procedures to adapt to the “evolving device landscape.”

WISeCoin

WISeCoin developers seek to revolutionize the world of digital identification via the integration of IoT, blockchain, and AI. The concept is anything but simple. WISeCoin integrates a host of proprietary technology to merge seamlessly merge these sectors. Here’s how the system functions.

WISeKey via Homepage

WISeKey via Homepage

Blockchain of Identity

Blockchain identification systems are nothing new to the sector. The ability to verify, authenticate, and securely manage digital identities via the blockchain continues to drive more firms into this business model. What makes WISeCoin different is their approach to the problem.

WISeCoin developers decided to leverage the immutable nature of blockchain technology by pairing it with the Internet of Things (IoT). The IoT is the network of billions of smart devices currently entering the market. These items are able to monitor and communicate with each other.

To put the scope of this network into perspective, there were 15.4 billion smart devices connected in 2015 according to IHS reports. Intel plans to expand that network to 200 billion devices by 2020. Of these smart devices, wearable units are the fastest growing. IDC forecasts predict a 31 percent increase in this sector by 2020.

As you could imagine, leveraging these devices is an extremely powerful way to monitor, verify, and authenticate people, or items. In order to accomplish this monumental task, WISeCoin developers employ “Root of Trust” RoT and PKI protocols. RoT protocols provide secure authentication across both digital and physical environments.

WISeKey International Holding Ltd.

The world of AI, IoT, and blockchain are destined to play important roles in the future. WISeKey combines the best attributes of these advanced sciences. The firm is sure to see continued success in the coming months as their STO approaches.

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