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A Look at the Silicon Valley Coin

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Silicon Valley Coin STO

The San Francisco-based venture capital firm, Andra Capital raised eyebrows across the market after announcing plans to host its Silicon Valley Coin (SVC) STO in the coming weeks. The funds raised via the STO will go towards the expansion of the company’s Open-Ended Technology Fund. The news demonstrates further security token usage in the US market, as well as, a desire to leverage blockchain technology to improve crowdfunding strategies.

The news officially broke on Jan. 22, 2020 via a company press release. In the release, Andra Capital described the purpose and concept of the Silicon Valley Coin. The firm cited the ability to provide investors higher returns and lower risks over a shorter investment period as one of the main focuses of the project.

Open-Ended Technology Fund

The Open-Ended Technology Fund is unique in many aspects. For one, the fund specifically targets companies in their hyper-growth phase. In this way, fund managers are able to combine a late-stage investment strategy with a perpetual VC structure that incorporates tradeable interests leveraged by the latest technology.

Tezos

Additionally, Andra Capital incorporated world-class service providers into the equation as a way to ensure the success of their project. For example, Andra Capital decided to partner with the Tezos Foundation to make the concept a reality. As such, Andra Capital decided to utilize the Tezos Blockchain for the project.

Tezos was a smart fit for the project because the firm provides Andra Capital access to global investors. Additionally, Tezos utilizes institutional-grade security features. Features such as formal verification streamline the entire investor onboarding process.

Silicon Valley Coin via Homepage

Silicon Valley Coin via Homepage

Notably, Tezos utilizes a Proof-of-Stake (PoS) consensus algorithm to secure its blockchain. This style of consensus is far more energy-efficient than traditional Proof-of-Work systems such as the one utilized by Bitcoin. Importantly, Tezos supports secure smart contracts and features a unique live upgrade process. This ability to do live upgrades is ideal for long-term, high-value applications.

TokenSoft

For their part, TokenSoft will provide access to its proprietary tokenization technology. These tasks will include the integration of KYC and AML smart contract protocols. These compliance mechanisms help qualify retail investors. Also, TokenSoft will both issue SVC and host the SVC STO.

Speaking on the new partnerships, Sam Raman, Head of Strategic Partnerships at Andra Capital called his partners “best-in-class providers.” He touched on their past successes and how each firm can provide their unique expertise in digital securities to better the overall project.

Silicon Valley Coin (SVC)

The Silicon Valley Coin (SVC)  is a regulatory compliant, asset-backed, and tradeable security token. Each token represents a unit of interest in the Andra Capital Open-Ended Fund. Investors receive dividends equal to the percentage of tokens they hold in the fund. SVC tokens cannot be traded or transferred without first meeting KYC and AML restrictions.

Silicon Valley Coin (SVC) – A New Token in the Field

Andra Capital definitely did their homework prior to the launch of this project. The firm managed to partner with some of the biggest names in the industry to bring their concept to life. It will be interesting to watch this STO launch considering the amount of positioning each partner holds in the market. For now, the security token sector just got a new VC fund.

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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 Tokens

Lawsuits Goes After Some of the Largest Names in Crypto

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Lawsuits Goes After Some of the Largest Names in Crypto

In what appears to be a broad swipe at the crypto sector this week, multiple lawsuits filed with the Southern District of New York claim wrongdoing against a myriad of blockchain-based firms. The class-action lawsuits allege wrongdoing on the part of crypto heavyweights such as Binance, Block.one, BitMEX, KayDex, BProtocol, Status and TRON Foundation, just to name a few.

According to court documents, the latest suit lists three plaintiffs – Chase Williams, Alexander Clifford, and Eric Lee. Interestingly, Roche Freedman is the firm heading the lawsuit. You may recognize the name from their recent lawsuits against Bitfinex and Tether. Additionally, they led the cases against Craig Wright and Bitfinex in the past.

Crypto Lawsuits – Details

The new lawsuit lists eleven companies in violation of regulations. These companies span the entire crypto sector.  Tokens such as ELF, CVC, TRX, TOMO, SNT, and others are listed for their use of IEO and ICO models in the past. The suit claims these tokens are unregistered securities. As such, the token made agreements with exchanges in violation of Section 5 of the Exchange Act.

Section 5 via Cornell Law School

Section 5 via Cornell Law School

The violations also extend to the named exchanges. The lawsuit lists KuCoin, Block.one, Quantstamp, Civic, and Binance as exchanges who sold unregistered tokens. Plaintiffs argue that these exchanges didn’t possess the required broker-dealer license in the U.S. Importantly, the plaintiffs believe that the SEC clarified in the past that the listed tokens are securities.

The suit also lists several crypto stars specifically. For example, Changpeng Zhao (CEO Binance), Vinny Lingham (CEO Civic), Justin Sun (TRON), Brendan Blumer (Block.one) and Dan Larimer (EOS) are all named in the suit.

Serious Allegations

The allegations are not trivial, For example, the trio argues that tokens such as TRX deceived investors about their purpose and level of decentralization. The suit claims that the centralization was “not apparent at that time.” It was only after the passage of time that investors gained the necessary insight to determine this. The suit states that there was a clear delay before the “issuer’s intent, the process of management, and success in allowing decentralization to arise”  become apparent. In this way, the allegations state investors were “misled into believing that TRX was something other than security when it was a security.”

Taking on the Crypto Industry

This case appears to be an attack on some of the most important firms, exchanges, tokens, and people in the crypto sector. The large scope of allegations and the global nature of the case will cause delays along the way. Consequently, it could be a while before this trial makes its way to the courtroom.

Lawsuits for the Stars

It’s hard to imagine a scenario in which the plaintiffs win this case. They would need to establish numerous precedents during the trial. These new rulings could stifle innovation in the US blockchain sector for years to come. As such, you can expect to see a measured response to this lawsuit in the coming weeks.

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Security Tokens

STOMarket Adds Mt Pelerin – MPS Token

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STOMarket lists Mtperelin

This week, the research and analytics firm, the STOMarket announced the addition of the first international security token to its tracker. Importantly, researches chose the Swiss tokenization platform, Mt Pelerin Group as the project to receive this honor. Now, potential, and current MPS token investors can monitor market developments easier than ever before.

Currently, the STOMarket hosts the largest repository of live security token data available globally. The firm has held on to this title since it first entered the market in 2018. Importantly, the group was the first data aggregator in the digital securities industry. As such, STOMarket researchers gathered primary offering data for over 300 STOs to date.

Mt Pelerin Group SA Tokenized Shares

The decision to list MPS tokens makes sense for a number of reasons. Primarily, the Mt Pelerin Group SA is one of the first tokenized shares to provide direct and full ownership to token holders. This strategy differs greatly from companies that utilize tokens simply as a form of tethered ownership rights. In this instance, the token is the actual share.

MPS Token

As part of the strategy, the Mt Pelerin Group tokenized its 2018 cap table. Interestingly, 5% of these tokenized shares were sold at a public offering. Importantly, no US investors were permitted to participate in the event. Notably, the group chose to make MPS tokens ERC-20 compliant.

MPS Token Data via STOMarket

MPS Token Data via STOMarket

Currently, Ethereum host the largest number of security tokens in the market. As such, ERC-20 compliant tokens enjoy added interoperability when compared to other protocols in the space. This interoperability comes in the form of more wallets, Dapps, and platform options. Already, the MPS token trades on the Uniswap Decentralized Exchange.

Mt Pelerin Joins the Ranks – STOMarket

Discussing the important milestone, Arnaud Salomon, CEO of Mt Pelerin stated that his team was “thrilled” to see the MPS token listed on stomarket.com. He described how this decision places his project in line with other “industry trailblazers.” Lastly, he described how the addition allows investors and analysts to monitor this unique token’s growth.

STOMarket Growth

Not surprisingly, the STOMarket continues to expand its role in the market. For example, in 2019, the firm launched support for secondary trading transactions. Immediately, investors gained access to important data on the six largest security tokens in the market. Since then, the group has added multiple tokens. Today, the firm is building advanced support for hourly security token pricing, trading volume, and market cap updates internationally.

Future Listings

As part of the STOMarket’s early response strategy, the company works closely with security token issuance platforms and exchanges. Notably, the firm has data partnerships with MERJ, BlockStation, Tokenise, just to name a few. Discussing the important role the company plays, Marko M. Hafez, Co-Founder and CEO of Blockstation explained how researchers took the “initiative to centralize and publicize STO and Tokenized IPO listing.”

STO Data Access

Providing the STO market with live trading data continues to be a critical role in the space. Thankfully, the STOMarket makes it easy for anyone to monitor and share data on developments in the industry. You can expect to see these researchers play a more pivotal role in the market as STO adoption continues to expand in the coming months.

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FINMA Releases Annual Report – List Security Tokens and DLT

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FINMA Releases Annual Report - List Security Tokens and DLT

This week, the Swiss Financial Market Supervisory Authority (FINMA) published its annual report for 2019. Interestingly, the report highlights developments surrounding security token offerings (STO) and distributed ledger technology (DLT). The news falls in line with efforts by Swiss regulators to further develop the country’s blockchain sector.

Challenging Questions

Discussing the results of the report, FINMA officials pointed out that there continues to be “challenging questions” the group encounters. Specifically, regulators face questions regarding the trade, custody, and settlement of different token types. Additionally, FINMA continues to receive questions about possible licensing requirements pertaining to the central securities depository pursuant to Art. 61 of the Financial Market Infrastructure Act (FMIA).

Importantly, FINMA regulators believe that tokenized securities need to be met with an updated regulatory framework. Specifically, regulators would like to create a new licensing category for institutions looking to trade, settle and custody securities under a single entity. These concerns are echoed by US regulators who also face tough questions regarding streamlining the securities settlement process for tokenized assets.

Stablecoins Are in the Spotlight

Also, the FINMA report gives special attention to the emerging market of stablecoins. Stablecoins are tokenized assets that are pinned to real-world assets such as gold, or in most instances, fiat currencies. Stablecoins have been in the spotlight lately as a myriad of major non-governmental concepts have come to light. Specifically,  Switzerland is home to Libra, Facebook’s stablecoin project. As such, regulators seek to control, but not stifle these efforts.

ICO Data

FINMA also included data on initial coin offerings (ICO) for the year. Importantly, there were 1185 individual ICOs that took place last year within the group’s jurisdiction. Of these ICOs, the group started investigations into approximately 60. Out of the 60 investigations, 30 resulted in enforcement actions. Surprisingly, these numbers are a decrease over 2018. In 2018, 42 investigations concluded in enforcement actions.

FINMA Releases 2019 Report

FINMA Releases 2019 Report

Specifically, FINMA identified a breach of the Anti-Money Laundering Act (AMLA) in around 10 ICOs. Another 8 cases narrowly missed prosecution but did make it to FINMA’s warning list. Ultimately, FINMA brought enforcement proceedings against three firms in 2019.

Increased Enforcement

Interestingly, this year’s report highlights a focus on the secondary-markets regarding digital assets. The group continues to explore structuring for the trading and custody of these tokens. As such, regulations continue to develop surrounding the operation of trading venues and other security token associated support activities.

FINMA

FINMA continues to play a pivotal role in security token adoption in the EU. Currently, the group oversees over 29,200 financial services firms and products. These products include a diverse range of blockchain-based applications. Additionally, FINMA has been actively collaborating with the Swiss Federal Council to develop a framework for blockchain tech through amendments to the current federal laws.

FINMA – A Step Ahead

FINMA’s forward-looking stance and flexibility in regards to the STO sector has allowed Switzerland to remain a financial hub for blockchain activity within the EU. Given the overall tone of Swiss regulators, it’s apparent that this group seeks to increase blockchain integration to new levels. As such, you can expect to see Switzerland retain its title as a global financial powerhouse for years to come.

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