This month saw the release of the QRC Blockchain Sentiment Survey. This annual survey is mailed out to over 200,000 professionals globally. The results are then used by firms globally to better understand the market sentiment. This year, 1,871 blockchain professionals participated in the survey.
Notably, this is the second year the study was conducted. The original survey released in October 2018. Not surprisingly, this year’s study had some interesting revelations. Most importantly, the overall market consensus is a feeling of rebound. Researchers discovered that investors are less weary of blockchain-based systems across the entire business sector.
Libra Boosted Confidence
In total 40% of survey takers felt “very confident” about ICO and STO adoption. The prior study put participants at a more neutral outlook on the industry. Facebook’s Libra announcement attributed the most to the boost in market confidence. When broken into regions, the most confident investors lived in North America. South America came in second place.
QRC Blockchain Sentiment Survey Interesting Finds
The surveyed revealed that there are fewer institutional investors in the market at this time than in 2018. The same data showed the sentiment amongst institutional investors as neutral. This is a stark improvement over last year’s survey which pegged institutional investor’s sentiment at “extreme caution.”
Also, the survey showed Hong Kong has the most crypto investors per capita. Despite the larger number of crypto investors, the study lists Hong Kong investors as “extremely cautious” about the market. Opposingly, Singapore has the most aggressive crypto investors.
When asked if they feel regulations help the crypto space, those surveyed responded across the board evenly. Regionalizing the question showed that North Americans don’t believe regulation helped the space at all. Reversely, Singaporean and Middle Eastern investors believe the opposite. These investors find regulations to help “a great deal.” African investors were split on the question.
QRC Blockchain Sentiment Survey – STO
This year’s study included a section dedicated to STO questions. In this section of the survey, it asks “How familiar are you with the STO process?” Surveyors were split across the board, with the majority responding “somewhat familiar.” Notably, North Americans responded “extremely familiar” more than any other region.
The survey then divided the question’s answers into the professional classes listed prior. Here the study found that CEOs and other senior officers are “somewhat or very familiar” with STOs. Mid-level management responded overwhelmingly with “not familiar.” Interestingly, licensed dealers and brokers ranked as the least familiar with the STO fundraising strategy.
Researchers attribute these responses directly to the level of investment each business category enjoys. CEOs are usually experienced investors with time to learn new investment strategies. Whereas, senior management enjoys some investments but for the most part, their career consumes their attention. Middle management doesn’t have any time, and less capital, to develop a new investment strategy.
Most Wanted Traits
When asked as tech startups what type of traits or important factors the company would seek in an STO advisor, the responses shifted from last year’s results as well. Those surveyed last year put looking for “experienced” advisors as the primary trait. This year’s study saw “technical expertise” become the most sought after trait.
There are many reasons for this shift. As the regulatory framework comes into place for the STO industry, startups are able to focus more on the technical aspects of their project, rather than unanswered legal questions.
Interestingly, the 2018 study found “price and fees” as the second most important advisor concern. This year’s study put “connection to investors” as the second most important. Even more interesting is that, both Hong Kong and Singapore placed “connections to investors” above “technical expertise”.
In North America, “experience” ranked top. This response is telling as the US doesn’t have a strong regulatory framework in place yet. South America placed “connections to top talent” as its most desirable trait, followed by “technical expertise.” The EU and UK put “network” first. Following this line of thought, “connections to investors” was the second.
QRC Blockchain Sentiment Survey
This year’s QRC Blockchain Sentiment Survey included a wide scope of blockchain professionals. This year’s participants break down into five business class categories. The first class is CEOs. This class includes founders, principal, and partners. In total this class made up 30% of the participants.
Senior Management was the next largest group of participants at 14%. This group includes VPs, Directors, and SVPs. Specialists and associates made up 9% of the total surveyed. The smallest group to participate was those in marketing and sales (5%) and investors (4%).
QRC Blockchain Sentiment Survey Global Participation
This year, North American participants made up 28% of those surveyed. European participants were 18%, followed by Middle Eastern blockchain professional at 9%. Both Asian (23%) and African (17%) participant levels outnumbered South American (3%).
Core Capabilities Vary
The report goes on to explain that each region’s core capabilities differ significantly. Basically, your location plays a major role in your ability to host STOs or any blockchain-based business successfully. The paper recommends that advisory firms use the findings to customize a marketing campaign to fit their region accordingly.
The QRC Blockchain Sentiment Survey is one of the most accurate studies in the sector. The firm estimates a margin of error +/- 2.98%. Researchers considered possible reasons for the positive response levels this survey.
Researchers believe part of the reason that responses were more optimistic this survey is the fact that there was a clear separation between blockchain tech and ICO question. Today’s market terminology is better understood than a year ago when STOs and ICOs were less differentiated.
Also, researchers noted the BTC bull run at the time of the survey. Surveyors attributed the run to a combination of factors. Of these, Facebook’s Libra cryptocurrency would be the most influential.
QRC HK Limited
QRC HK Limited is located in Sheung Wan, Hong Kong. The firm specializes in data collection and examination. The survey lists Al Leong as the Head of Customer Success and as the firm’s contact regarding survey questions.
You can expect this survey to help guide countless blockchain professionals this year. The insight provided allows for an overall better understanding of the trajectory of the market.
A Look at the Silicon Valley Coin
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.
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.
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.
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.
3 More Executives Leave SDX Due to Discrepencies
The blockchain-based digital asset trading venue SDX continues to have a rough start to the new year. This week, another high-level executive announced their departure from the firm. The news brings the number of executives who left the company in January 2020 up to three. The news demonstrates a realignment and shuffling of SDX’s business plan. Also, it showcases the growing pains associated with these changes
According to company documentation, all of these executives departed from their full-time positions in January. The three individuals to leave are Alex Zinder, an architecture lead at SDX, Ivo Sauter, SDX’s head of clients and products, and Sven Roth, the firm’s chief digital officer. The later of the trio agreed to stay on as an external advisor to SDX.
In a recent interview, Sauter explained the motivation behind his decision to leave. He touched on a number of critical changes made throughout the firm. These changes included a shift from the platform’s original vision. He explained that at first, the platform was to utilize the banking sector as a bridge into the rest of the market.
However, this strategy quickly changed as SDX began to tailor its platform specifically, and solely for use by banks. Sauter described how these changes effected moral and fueled the growing dis-alignment between executives and owners. He explained that originally, the platform was to be much more inclusive. For example, SDX was to enable startups to provide services around its features.
Sauter also took a moment to touch on the negative effects this corporate culture had on the project. He explained that, in his opinion, a bit more separation needed to occur between SDX and its mother company, the Swiss stock exchange operator SIX Group. Apparently, these feelings of discourse only grew as the mother company took more and more influence on SDX’s day to day operations.
Additionally, Sauter explained how the big-company approach also inhibited the company’s ability to save. Large corporations require much more reporting. In turn, this reporting raises operating costs. Additionally, smaller firms have more liberty in terms of flexibility and risk management. In the end, the corporate approach made many of the executives feel as if they had been stifled.
Despite the discrepancies, Sauter stated that he had left on good terms. He went as far as to claim that he was at a point in his career that he had no desire to have his contract renewed. Consequently, SDX chose to not offer a renewal.
Challenges in the Market
As with any major corporate reshuffle, there are going to be individuals that no longer fall in line with the platform’s overall goals. Discussing these challenges, a SIX spokesman touched on the changes and what they mean to the project. They explained that whenever you have a concept built from scratch, there are going to be many ups-and-downs associated with the development. In the end, the firm acknowledged that these changes have begun to add up with the spokesperson stating that the firm has “spent quite a few Swiss francs” on the ordeal.
SDX Moving Forward
From the tone of SDX’s past employees, the company is undergoing some heavy internal changes. As such, there is no way to determine exactly how these personnel changes will affect the overall strategy the company has chosen to follow. One thing is for sure, SDX appears to have made a priority shift towards servicing the banking sector exclusively with its new platform.
SEC Charges Opporty for 2018 ICO
This week, the Securities and Exchange Commission (SEC) continued its ICO crackdown. This time, the firm levied charges against project Opporty Founder and Brooklyn-resident Sergii Grybniak. The firm alleges that Grybniak broke the law when his firm raised approximately $600,000 during its 2018 ICO.
News of the charges first broke via Jan. 21 press release. In the release, the SEC reveals the charges laid against Grybniak in detail. Importantly, the primary charge is participating in the unregistered sale of securities. Additionally, the SEC claims that Grybniak made false statements in order to encourage more investor participation.
These statements include a myriad of exaggerated and completely fake claims. In one instance, Opporty claimed that its 2018 ICO was “100% SEC-compliant.” Unfortunately, this claim proved to be the tip of the iceberg. Apparently, Opporty also claimed to have thousands of “verified providers” who were ready to work with the platform.
This claim became so overblown that in one piece of marketing material, Opporty suggested it had a business database that included around 17 million participants. In actuality, the firm had no partnerships. Unfortunately, these claims served one main purpose, to push more investment capital into the ICO.
Major Software Firm
As if the shower of lies put forth weren’t enough, Opporty also made some very specific partnership claims that proved to be bunk as well. According to the SEC, the firm lied about a partnership with a major software company. This lie was to help ease investor doubt about the ability of developers to deliver on their hefty platform promises.
SEC Steps In – Opporty
It doesn’t take much research to see why Opporty ended up in the SEC’s crosshairs. Now, the SEC seeks injunctions against all future digital offerings by the company. On top of the cease-and-desist, regulators require Opporty to return all the funds the company raised during its 2018 ICO. Also, the firm is to face a variety of civil penalties for its actions.
Opporty executives sold the concept to investors as a blockchain-based ecosystem for small businesses. The platform was to provide these small-to-medium sized companies with access to advanced blockchain systems. For example, businesses could list their services and lock in their clients via smart contracts.
United States Investors
Aside from the obvious scamming that took place, Opporty made another key error in its strategy. You see, unlike many similar ICOs, the offering did not explicitly exclude U.S. investors from participating. The 2018 ICO included investments from around 200 US citizens. In this way, the firm invited the SEC to monitor its actions throughout its entire crowdfunding campaign.
An Oppurty Lost
Given the long list of violations this firm now faces, it’s easy to imagine a scenario in which Opporty decides to close its doors. Already, numerous SEC-charged firms have taken similar measures prior to refunding clients’ funds. For now, Opporty has a long legal battle and hefty fines to deal with. You can expect to hear more from this case as the SEC pursues its charges against Grybniak.