Monthly Update
A Month in Review – December 2019
While December brought various highlights pertaining to digital securities, one that stands out is a recent proposal, put forth by the SEC. The regulatory body has recognized a need to redefine/modernize the definition of what constitutes an accredited investor, and has set out to do just that. Beyond these potential changes, we saw a flurry of activity, involving Japanese companies, becoming increasingly involved in the sector.
This edition of ‘The Digital’ looks at each of these developments, in addition to highlighting a few key articles provided by securities.io during this past month.
Transfer Agents
One of the various designations necessary for the digital securities sector to function, is a Transfer Agent. Whether acting as an intermediary, issuing certificates, or dealing with lost certificates, their role is an important one. December saw multiple companies look to attain this designation.
TokenSoft Subsidiary, DTAC LLC, looks to ‘Join the Party’ as a Transfer Agent
Vertalo Receives SEC Letter of Effectiveness
Raising Capital
As they continue marching forward, Ripple announced during December, that they have achieved a $10 billion valuation. This was made possible through a successful $200 million series C, headlined by Tetragon, SBI Holdings, and Route 66 Ventures.
This announcement came at a time with Ripple still actively dealing with legal battles surrounding the purported illegal sale of securities. Clearly this event has not swayed others’ beliefs in the company, as made evident with their aforementioned valuation.
Ripple Attains $10 Billion Valuation after $200 Million Series C
Japanese Expansion
November saw increased levels of Japanese activity, with December serving to continue this trend. Both, key investments and acquisitions, based in Japan specifically caught our eye.
Huobi Japan Secures $4.6M from Tokai Tokyo
Securitize Increases Ties to Japan through First Acquisition
In The News
A Global Perspective
With the end of December marking not only the end of the year, but the decade, we thought it a perfect time to gauge industry sentiment. The following articles represent a short series, in which we provided a questionnaire to CEOs from companies surrounding the world.
Through these insights, it is clear that, while there is work to be done, there is positivity abound with, both, a 2 and 5 year perspective – regardless of location.
Julian Kwan, CEO of InvestaX, and one of the participants in this series, summed up their expectations for the sector in the coming years.
“In 2 years many institutions will have issued their first digital security, in 5 years there will be no new company set up in paper form anymore and every security offering will be digital as smart governments migrate company set up and management to distributed ledgers removing the need for any paper.”
Interviews
Derek Schloss, Director of Strategy for Security Token Academy
After a recent contribution to our ‘Thought Leaders’ series, by Derek, we thought it prudent to learn more about, both, himself and Security Token Academy. This discussion does just that, in addition to touching on the subtleties behind the various forms of crowdfunding. Read More
Oliver Siah, CEO of Fraxtor Capital
In this exclusive interview, we learn about, not only Fraxtor and real estate, but Oliver himself. From acting as a seasoned Singaporean Air Force Officer, to investing in real estate, Oliver possessed a unique and diverse background, sure to help in the success of Fraxtor. Read More
Christian Platzer, Managing Partner of Black Manta Capital
From the rationality behind the Black Manta name, to their relationships with various European entities, this interview sheds light on it all. Check it out to learn a bit more about this young company. Read More
Education
Under Scrutiny: How to Pass Due Diligence as a Blockchain Project
Our latest entry into our ‘Thought Leaders’ series, sees repeat contributor, Gene Deyev, elaborate on what due diligence entails. From Legal, Technical, and Business considerations, the process may be more in-depth than many realize. Read Here
Around the Web
SEC Proposes to Update Accredited Investor Definition to Increase Access to Investments – Securities and Exchange Commission
With the ongoing development of next-gen technologies, many have called for an update to antiquated industry definitions; an update which better reflects current markets and their participants.
This call was heard, as the SEC announced a proposal put forth which would greatly change who we deem an accredited investor. In doing so, digital securities may soon see a new crop of investors gain access to the sector. Read More
With 2019 closing out with optimism abound, surrounding digital securities, we fully expect 2020 to be an action packed year. The month of January hasn’t disappointed. Over the past few weeks, we have, not only seen multiple tokenization projects announced, but had the pleasure of completing various exclusive interviews.
This edition of ‘The Digital’ looks to shed light on a few key developments, as well as highlight the contributions of various CEOs.
Patented
While a common name when discussing Bitcoin, Jack Dorsey recently caught the attention of those involved with a more focused niche – digital securities. This attention came as his company, Square, was successfully awarded a new patent, describing a new form of payment network; a network which supports digital securities.
Square Awarded Patent for Payment Network Supporting Securities
Series A
Pantera Capital, WisdomTree Investments, and Abu Dhabi Investment Office – These are just a few of the contributing companies to a Series A recently held by Securrency.
With these contributors, Securrency looks to continue the development of their non-specific blockchain framework; the goal of which is to unlock ‘global liquidity’ of digital securities.
Securrency pulls in $17.75M During Successful Series A
In The News
A Continuing Crackdown
In order for the world of blockchain to continue moving in a positive direction, the bad actors within the space need to be identified and removed. Illegal activity does nothing but paint the nascent technology in a poor light.
The SEC is, perhaps, doing more than any to achieve this purge, and hold industry participants accountable for their actions. This was made abundantly clear this past month as we were greeted with various developments surrounding fines and warnings being levied by the regulatory body.
In their warning surrounding IEOs, the SEC was very clear on the associated dangers.
“The federal laws and regulations governing registered national securities exchanges and ATSs are designed to protect investors and prevent fraudulent and manipulative trading practices. Many online trading platforms may give the misimpression to investors that they are registered or meet the regulatory requirements for a national securities exchange or ATS, and therefore may lack the investor protections that a national securities exchange or an ATS provide to investors.”
Disguises, Fake Identities, and an Illegal ICO – The SEC Looks to Lay Charges
After Months of Silence by ICOBox, the SEC Seeks ‘Default Judgement’ and ‘Permanent Enjoinment’
Ripple XRP Under Increased Scrutiny as a Security
SEC Provides Warning on ‘Initial Exchange Offerings (IEOs)’
Interviews
Luka Gubo, CEO of Blocktrade
In this discussion, Luka Gubo touches on his beginnings during the ‘great financial crisis’, and how this led to the creation of Blocktrade. He further delves into what Blocktrade is doing to improve European capital markets. Read More
Dan Doney, CEO of Securrency
With Securrency recently closing out a successful Series A, we were able to catch Dan Doney at the perfect time. This interview touches on, not only products offered, but the importance of their investors, and future plans for Securrency moving forward. Read More
Darius Liu, COO of iSTOX
In this exclusive interview, Darius Liu took the time to share, not only his personal background and experiences, but the philosophies which drive iSTOX.
“We believe that DLT and smart contract technology will open new worlds of possibilities when it comes to how investing works.” Read More
Education
Canadian Securities Administrators (CSA) Address Crypto-Assets within Regulatory Framework
A recurring theme surrounding digital securities and blockchain based endeavours involves a perceived lack of clarity on regulation. Looking to address this, the Canadian Securities Administrators took the time, this past month, to educate the public on how securities law apply to these new forms of assets. Read Here
Around the Web
Smartlands Сooperates with London Strategic Consulting to Assess Digital Securities Space in the UK
Tokenization platform, Smartlands, is a leader within the United Kingdom’s digital securities sector. The team at Smartlands thought it prudent to gauge the market in an effort to put their best foot forward, going into 2020. The result was a thorough, and informative, assessment of the sector, spearheaded by consulting firm, ‘London Strategic Consulting’. Read More
Digital Securities
November was a month with more ups than downs. While a tokenized real estate project fell through, there were various examples of strategic investments; Investments which will see international expansion into countries like Japan. In this monthly recap, we look at both sides of the coin, while highlighting a few of this month’s exclusive commentary from industry insiders.
Partnerships
For the promise of increased liquidity surrounding digital securities to come true, there need to be exchanges which support the assets. This partnership looks to begin solving this, as Uniswap will facilitate secondary markets for RealT and their RealTokens.
RealT Announces Partnership with Uniswap Exchange
Strategic Investments + Raising Capital
Strategic investments can help a company expedite expansion, through acquiring foreign companies which already hold certain licensure. They can also be viewed as an opportunity for investors, who are looking to gain exposure to companies which have the potential to influence their respective industries. November saw OpenFinance announce their search for funding, along with BnkToTheFuture looking to make a splash in U.S. markets.
OpenFinance Seeks to Raise $50 Million
BnkToTheFuture Eyes U.S. Based STOs through BMO Capital Investment
Japanese Expansion
For the past few months, there appeared to be flurries of activity regarding expansion within certain regions. While October saw an emphasis on European expansion, November saw the same within Japan. This was made evident through companies, such as Tokai Tokyo and Securitize, increasing their presence within the nation.
Tokai Tokyo Financial Holdings to Bring Digital Securities to Japan
Securitize to Expand within Japan after Recent Investment
In The News
UKJT Views Digital Assets as Property under Current Regulations
As regulatory clarity is finally being afforded, companies can begin to tailor their actions, moving forward, with compliance in mind. One of the more recent examples of an important decision shared with the industry, was that of the UKJT and their viewing digital securities as property.
Smartlands, an issuance platform operating in the UK, saw their CMO, Yaroslava Tkalich, comment on the development.
“As the first-ever UK-based platform specialising in tokenising the real economy assets on the Stellar blockchain, Smartlands enjoys substantial footing on the issue; with the clarification by a panel of judges and legal specialists, our almost two-year headstart turns into a major strategic advantage for years to come.” Read Here
Vertalo Demonstrates Ease of Tokenization with Inaugural Webinar
There will come a point in time when companies, developing their solutions for the digital securities sector, will need to go live. With much of the industry in a developmental stage, there is a perceived lack of simplicity among solutions. Vertalo recently set out to dispel this notion, with a demonstration on how to tokenize assets through their platform. Read Here
Interviews
Masha & Xenia Vyazemskaya, Founders of ValueTokenized
In this exclusive interview, we speak with Masha and Xenia Vyazemskaya. They are a duo who cofounded ValueTokenized, in addition to hosting a popular blockchain oriented podcast. This discussion touches on both their expectations for the future, and the current industry’s current state. Read More
Aaron Kaplan, CEO of Prometheum
Here, we had an exclusive conversation with Aaron Kaplan, where the features and decisions driving Prometheum were touched on. From a custom Alternative Trading System, to Smart Security Tokens, learn what Prometheum is all about. Read More
Education
Firsthand Overview of Digital Securities Legislation in Malta
Our latest entry into our ‘Thought Leaders’ series, sees Gene Deyev delve into the regulatory climate surrounding digital securities within the nation of Malta. Read Here
What are Digital Securities?
Real estate, venture capital, hedge funds, debt instruments, and more. What constitutes a digital security? And what benefits can they afford? Read Here
Around the Web
Tokenized Real Estate Falters as another Hyped Deal Falls Apart – CoinDesk
While tokenized real estate holds great potential, there was bound to be a few hiccups along the way, as the industry found its footing. One such hiccup was experienced recently, as a proposed deal between Fluidity and Propellr fell through. While unfortunate, digital securities march forward. Read More
Digital Securities
October was a positive month for the digital securities sector. It has become increasingly apparent that Europe is leading the charge in the development, and adoption, of services revolving around digital securities. This edition of ‘The Digital’ highlights some of these EU based developments, as well as a few key interviews from industry leaders such as tZERO CEO, Saum Noursalehi.
Partnerships
Keeping on point with European influence within the sector, October saw Canadian based, DigiMax, partner with German based, Black Manta Capital. This alliance was forged with the specific goal of DigiMax to expand operations across the Atlantic. DigiMax looks to utilize licensure held by Black Manta to facilitate this expansion.
DigiMax Eyes European Expansion through Black Manta Partnership
Tokenized Real Estate
Not content on transforming digital securities in North America, alone, tZERO looks to expand their influence into the United Kingdom. This path begins with their newly announced partnership with Alliance Investments. This move, which will see a 180 unit luxury property tokenized, is being heralded as the first of many moves expected to see $640 million worth of future real estate tokenized.
Two-Way Street
In Other News
As Support Dwindles, Will Libra Flame Out?
Industry Participants Finding Footing within Evolving Digital Securities Sector
Interviews
Saum Noursalehi, CEO of tZERO
Paul Claudius, CEO of BlockState
Philip Moustakis, Counsel at Seward & Kissel LLP
Education
The Howey Test: The Fine Line Between a Security Token and a Utility Token
Sufficient Decentralization and Security Tokens
With the SEC coming to various settlements with companies in October, Derek Schloss takes a closer look at their stance and interpretations of these situations. How did these events vary, and what does it mean moving forward? Read Here