Security Token News
As Support Dwindles, Will Libra Flame Out?
Libra : Plagued by Fear and Anger
When first announced, Facebook subsidiary, Calibra, and its digital token, Libra, pointed to a bright future for digital assets.
In the time since, however, Calibra and its two proposed tokens have been met with nothing but fear and hostility – with much of it warranted.
Despite a lawsuit, and dwindling support levels, those behind the project remain adamant that they will make it work. While this may appear foolhardy, at first, it is important to remember the power held by the company organizing the entire venture. To be frank, Facebook has the financial capability and influence to make this happen on their own.
Losing Support
As stated, since announcing their project, Facebook and their subsidiary, Calibra, have experienced a tumultuous few months. As a result of on-going scrutiny towards the project by government officials around the world, we have now seen at least 6 of the major backers behind the project withdraw.
The following are a few of the statements issued to news outlets such as CoinDesk, Financial Times, and more, by some of those withdrawing from the project.
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PayPal
- “We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future. Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.”
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MasterCard
- “MasterCard has decided it will not become a member of the Libra Association at this time. WE remain focused on our strategy and our own significant efforts to enable financial inclusion around the world. We believe there are potential benefits in such initiatives and will continue to monitor the Libra effort.”
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Visa
- “Visa has decided not to join the Libra Association at this time. We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations… Visa’s continued interest in Libra stems from our belief that well-regulated blockchain-based networks could extend the value of secure digital payments to a greater number of people and places, particularly in emerging and developing markets.”
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Stripe
- “Stripe is supportive of projects that aim to make online commerce more accessible for people around the world. Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage.”
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EBay
- “We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member…this time, we are focused on rolling out eBay’s managed payments experience for our customers.”
Despite the loss of these big players, Calibra remains well backed by a slew of others, such as Coinbase, Uber, Spotify, and more. Will these companies, and others, follow suit and abandon ship?
Trademark Infringement
Further complicating the situation surrounding Calibra and its two tokens, is the recently announced lawsuit against the company.
Current, a New York based financial service provider, has filed a trademark infringement suit. More specifically, the company believes that Facebook copied their branding, and used it for their own purposes. The following images show the icons used by each company, with obvious similarities being evident.
While this situation is still in its early days, it will do nothing but complicate an already complicated situation. Time will tell what effect this potential trademark infringement has on the viability of Calibra, overall.
Calibra
A subsidiary of Facebook, Calibra, was launched in 2019. This project was built to act as a digital wallet for supporting the Libra stablecoin as an eventual global currency.
For a more thorough look at the project, and the two tokens it is built upon, make sure to read the following article.
Calibra – A Product of Facebook, Built on Two Tokens
In Other News
Over the past few months, we have covered multiple developments pertaining to Calibra and their respective tokens. We will continue to do so as the situation unravels. For now, here is a brief look at the progression of acceptance experienced by the project.
SEC See Pressure to Label Libra a Security Token
Authorities Weigh in on Facebook and their Stablecoin, Libra
Will Facebook Subsidiary, Calibra, See the Light of Day?
The blockchain-based social media platform, VeVue announced plans to host an STO in the coming weeks. The company intends to expand the platform’s capabilities with the funds raised. Now content creators have a more lucrative alternative to consider moving forward.
News of the company’s intentions first broke via an October 14 press release. In the post, the company announces its new strategy and partnership. As part of the firm’s new crowdfunding approach, VeVue partnered with the hugely popular CBX exchange.
CBX Exchange
For its part, CBX will be responsible for the sales, token issuance, and distribution of the VUE token. CBX is one of the largest crypto exchanges based in the Middle East. The firm operates a fully compliant EU exchange. Developers integrated both AML and KYC protocols directly into its trading platform.
VeVue via Homepage
CBX recently launched a campaign with Alibaba competitor GoJoyin in which the platform secured over $10 million in funding. The experience gained in this campaign will be critical for VeVue STO’s success.
VUE STO
The VeVue STO will commence on October 28, 2019, at 4 pm PST. Interestingly, the event is scheduled to only last 48 hours. CBX intends to issue 5 million VUE tokens to qualified non-US investors. Vevue also announced that there will only be 100 million VUE tokens in total available to investors. Of these tokens, 35 million are reserved for investor purchases.
Vevue and CBX Unique Strategy
CBX and Vevue have a unique strategy for their crowdfunding efforts. The company intends to host an STO monthly moving forward. Additionally, these auctions will be Dutch-style. Basically, the official token price is set after taking in all bids.
Highest-Price VeVue STO
This strategy enables the firm to receive the highest price for the total offering. For example, investors place their bids which include the price and quantity they desire. The firm will then accept the top 5 million bids for the tokens.
VUE Token Benefits
VUE token holders receive a portion of gross revenue collected via the VeVue social media app. Consequently, investors actively earn from VeVue’s ecosystem. The App provides content creators with a revenue-generating outlet. Here, users can create and monetize content such as videos easily.
VeVue Transaction Fees
Vevue charges a 5% transaction fee on the monetized content. This fee then enters into the dividend pool from which STO investors receive payments daily. Importantly, dividends are paid in VUE tokens. This unique strategy encourages users to create high-quality content to earn more tokens.
Next Level Social Media
Traditional social media doesn’t allow users the opportunity to earn from their content contributions. In fact, the current social media giants provide content creators with zero payment for their efforts.
Social Media Heat
VeVue’s timing is impeccable as social media giants such as Facebook continue to confront lawmakers over a myriad of concerns. Facebook, in particular, appears to be in the target of regulators after announcing plans to issue its own native cryptocurrency called the Libra.
A Better Social Media Alternative
VeVue appears to have unlocked a better way to social media for everyone. Providing users with an opportunity to earn tokens for their content is a smart concept that has proved to be a great alternative in the past. You can expect to hear more from VeVue in the coming weeks as its STOs hit the market.
The crypto community got some exciting news this week after the Commodity Futures Trading Commission (CFTC) Chairman stated that Ether (ETH) is a commodity. The news follows similarly worded statements from SEC officials in the past.
The news came via an Oct 10 statement from acting CFTC Chairman Heath Tarbert. In the post, the Chairman announced that he believes Ether is not a security at this time. The news comes at a critical point in Ethereum’s development.
The news is a huge win for the Ethereum community. Currently, Ethereum is the second-largest cryptocurrency in the world by market cap ($20 billion). The ruling is important because it means Ether falls under CFTC regulations and not SEC securities regulations. Consequently, the decision allows financial institutions to offer a wide array of new products and open up entirely new markets moving forward.
Ether Futures and Derivatives
In the past analysts pointed out that the Ether derivatives market suffered due to the lack of transparency. Tarbert now says that you can expect to see both Ether futures and derivatives markets in the very near future. Surprisingly, he stated that these financial tools would hit the market in less than a year.
Ether Creator Vitalik Buterin via Medium
Transformative Token
According to the Chairman, Ether is a case of a transformative token. Basically, the token started as a security during the ICO event. At that time the enterprise was playing a controlling role over the digital asset. As time progressed, the Ethereum enterprise faded to the background as the cryptocurrency decentralized. Now the token serves as a utility.
Reverse Securities
Additionally, Tarbert described the reverse scenario in which a utility token slowly develops into a security. In this situation, you start off with a fully decentralized organization. Over time, the enterprise steps back in to take more control. Consequently, this creates a scenario where investors seek profits from the efforts of others. Now the token is a security.
Notably, SEC officials stated that they do not consider Ether a security in its current state. However, both the SEC and CFTC did point out that during the company’s ICO, Ether acted as a security. Luckily the SEC declined to fine the Ethereum development team for its ICO.
Bitcoin is a Commodity
Falling along this line of thought, Tarbert explained that Bitcoin is also a commodity. This statement coincides with the SEC’s decision to decline to label Bitcoin as a security. Analysts consider these actions as a precursor to this week’s news.
PoW to PoS
Also, Ethereum developers announced a shift from the Proof-of-Work (PoW) consensus algorithm to a more energy-efficient alternative, a Proof-of-Stake (PoS) consensus mechanism. PoS systems don’t require your PC to do heavy computations. Instead, users earn rewards for “staking” tokens in their wallets. In this manner, PoS tokens use far fewer resources.
Ether Moving Forward
The Ethereum community has much to celebrate moving forward. The cryptocurrency continues to see development across the entire sector. You can expect to see the Ethereum community expand as more ETH-based products enter the market in the coming months.
Launching Markets – BSTX
The Boston Securities and Token Exchange (BSTX) has recently filed a proposal for various rule changes with the SEC. These changes would allow for BSTX to launch what would be the market’s first digital exchange supporting full-fledged digital securities.
Joint Filing
The Boston Securities and Token Exchange is a by-product of a partnership between tZERO and BOX Digital. This pairing of companies launched the joint venture in mid-2018, with the intent to develop the first fully regulated digital exchange in the U.S.
BSTX is expected to utilize blockchain technology provided by tZERO, while BOX representatives work towards establishing regulatory clearance. With each providing different areas of expertise to BSTX, both tZERO and BOX have made it clear that this is a joint venture, with each having a 50% say.
Rule Change
The proposed rule change discussed here dates back to late June, 2019. At the time of the filing, it was viewed as having the potential to create a ‘rulebook’ for the operation of such exchanges in the United States. Only now, months later, is the SEC making the filing available for public commentary.
A few of the noteworthy attributes of their proposed exchange are as follows:
- Asset ownership recorded using a private blockchain
- Trading enabled through use of BSTX tokens
- Whitelisted clients
At the initial time of its filing, we took a brief look at BSTX and their plans, including the use of an in-house token developed by the exchange.
Boston Security Token Exchange (BTSX) Seeks SEC Rule Change
Commentary
In their filing, made public by the SEC, the BSTX begins by outlining their plans and intentions for the proposed exchange.
“BSTX would operate a fully automated, price/time priority execution system for the trading of “security tokens,” which would be equity securities that meet BSTX listing standards and for which ancillary records of ownership would be able to be created and maintained using distributed ledger (or “blockchain”) technology.”
Boston Securities and Token Exchange (BSTX)
Operating within the United States, BSTX is a proposed digital securities exchange, which was founded in 2018. The company looks to become the first exchange of its kind, supporting full-fledged digital securities.
CEO, Lisa Fall, currently oversees company operations.
In Other News
Whether it be through the backing of others, or through their own endeavours, tZERO remains hard at work, establishing the digital securities sector.
We were recently fortunate enough to have interviewed tZERO CEO, Saum Noursaheli. In this exclusive interview we discuss past and future events pertaining to the company. Make sure to check out the following interview to learn more!
Interview Series – Saum Noursaheli, CEO of tZERO