Security Tokens
CFTC to Give its Stance on GRAM Token Classification
This month, the Securities and Exchange Commission (SEC) stepped up its battle against the mobile messaging giant Telegram. For months, the two groups have been enthralled in a trial to determine the classification of Telegram’s GRAM token. This week, in an attempt to break the legal stalemate, the SEC reached out to the Commodity Futures Trading Commission (CFTC) to hear its stance on the project.
According to reports, a letter was sent from the federal judge presiding over the case, Kevin Castel, directly to the Office of General Counsel of the United States Commodities Futures Trading Commission. Specifically, the letter asks the organization to determine if the GRAM token is a security or not.
As such, the importance of this document can’t be overstated. The court’s determination will have a direct effect on the classification of certain types of cryptocurrencies within the United States moving forward. For its part, the SEC argues that the GRAM token is, in fact, a security.
Regulators stated that the entire crowdfunding event, which raised around $1.7 billion, violated the Securities Act of 1933. On top of the claim, SEC alleges that Telegram participated in the unauthorized sale of securities. Lastly, the SEC also claims the group convoluted the difference between a purchaser’s investment in the digital asset and the delivery of the asset itself.
Telegram Refutes the Charges – GRAM
Despite the heavy-handed approach the SEC has taken, Telegram continues to stand its ground. The firm insists that its GRAM token is a commodity. As such, Telegram stated that GRAM tokens do not fall under the SEC’s jurisdiction.
Telegram ICO Data via ICO Drops – GRAM
Telegram ICO
Recent court filings shed some light on the details of Telegrams 2018 ICO. According to these documents, Telegram raised $1.7 billion from 171 investors. Of these investors, $424.5M came from 39 US-based investors. The remaining $1.28 billion in funding came from international participation from 132 additional investors.
What is the GRAM Token?
The GRAM token project originated with the goal to provide Telegram users with an online currency to supplement the Telegram platform. Developers envisioned a cryptocurrency that saw global usage among Telegram’s 300 million subscribers. According to company executives, the hope was to spur the growth of a new economy that would use Telegram as the man medium of communication.
So Are GRAM Tokens Security Tokens?
While the SEC continues to drive home their perspective on Telegram’s blockchain projects, the cryptocommunity awaits a final answer. As it stands today, several filings were made with no relevant determinations yet. Telegram executives and regulators are keen to the fact that this case would set a major precedent across the entire US blockchain sector.
When you consider the ramification of the Telegram trial, it’s easy to see why company executives are not willing to bow to the SEC’s pressure. For one, the firm has billions in funding to fight a long-drawn-out court battle. Additionally, Telegram executives have put forth a lot of effort into the creation and maintenance of the GRAM ecosystem. To lose these funds, would be a huge hit for the firm.
This week, the German Bank von der Heyd stunned the EU banking community after revealing plans to issue security tokens and offer custodial services in the coming weeks. The news demonstrates further integration of blockchain technology among the EU’s traditional banking sector, as well as, a desire by Bankhaus von der Heydt to become the industry leader.
News of the new services first broke via a press release. In the release, the private bank shed some light on the project and the progress to date. Company documents revealed that the bank completed its first custodial transactions successfully this month. Additionally, the blog gave some insight into the bank’s future intentions.
Tokenization Strategies
According to reports, Bankhaus von der Heydt will provide commercial clients the ability to tokenize assets via the platform. In this way, bank officials seek to become a major force in the German blockchain sector. Additionally, the bank has plans to issue a EURO-backed stablecoin in the coming months to supplement its digital asset economy.
The new products make Bankhaus von der Heydt the first German bank to provide a digital asset custody solution to clients. As such, the firm hopes to achieve a significant strategic advantage over the competition. Discussing the new strategy Bank von der Heydt managing director, Philipp Doppelhammer spoke on his firm’s work. He explained that bank researchers spent years observing the blockchain space. This research helped the firm to design relevant products to the current state of the market.
Bankhaus von der Heydt Managing Director Philipp Doppelhammer via Xing
Doppelhammer also explained why these products provide his firm with outstanding added value. As the only German bank to offer licensed digital asset custodial services, Bankhaus von der Heydt is positioned to be a major player in the EU markets. Lastly, he took a moment to let the public know that these products are now ready for the market from a regulatory and technological perspective.
Partnerships
In order to ensure the success of the venture, Bank von der Heydt collaborated with FinTech and blockchain services provider, Bitbond. For its part, Bitbond provided the technical infrastructure surrounding the custodial aspects of the strategy. Additionally, the bank utilized Bitbond’s proprietary technology to develop several asset structuring and asset servicing products as well.
Speaking on the partnership, Radoslav Albrecht, CEO, and founder of Bitbond explained how his firm continues to work with several banks and financial intermediaries to expand the capabilities of the platform. He also touched on the important benefits tokenization brings to the market, such as liquidity.
Additionally, Albrecht described the feeling of excitement surrounding the project. Here he pointed out that this was the first project to use blockchain technology in the area of securitization and private placements in the country. He also stated that his firm was “pleased to cooperate” with the bank, which he labeled a proven industry expert.
Bankhaus von der Heydt Takes the Lead
It now appears that Bankhaus von der Heydt will have a strong positioning in the market moving forward. This firm continues to utilize its unique stance to keep up-to-date on all the latest FinTech trends. You can expect to hear a lot more from this group as its new projects gain popularity in the coming weeks.
In a sign of the changing times, the Japanese conglomerate Sony announced an investment into the security token issuance platform, Securitize. Sony now joins a long list of global tech giants entering the blockchain sector. This latest maneuver demonstrates the maturing of the Japanese security token market, as well as, a major milestone for Securitize.
Discussing the monumental achievement, Securitize CEO and co-founder Carlos Domingo spoke on what the investment means to the industry. He explained that Sony’s decision validates Securitize as one of the chief “architects of digital capital markets.” He also touched on Sony’s coveted brand and how the firm’s reputation is sure to bolster further interests in the security token sector.
Sony Financial Ventures (SFV)
Sony made its investment into Securitize via one of its main subsidiaries – SFV.GP. Notably, SFV.GP’s management responsibilities are split between Sony Financial Ventures (SFV) and Global Brain. Speaking On the news, SFV director Junji Nakamura explained the new capabilities blockchain tech brings to the table. He described the ability to create new asset classes and add liquidity to the market. Finally, he welcomed the challenges that his firm will encounter on their journey.
SFV is part of the Sony Financial Group. The Tokyo-based Sony Financial Group is a much larger financial services firm that includes numerous holdings on behalf of Sony. These holdings include Sony Life Insurance, Sony Assurance, Sony Bank, Sony Payment Services, and Sony Lifecare, just to name a few.
Securitize via Twitter
The Sony Financial Group has a reputation for investing in startups with the potential to disrupt markets. Currently, the firm has investments in Asia, North America, and Europe. These investments span the gambit of upending technologies including artificial intelligence (AI), the Internet of Things (IoT), and robotics.
Securitize Funding
The decision to invest in Securitize by Sony comes on the heels of a successful funding round for the firm. Securitize secured $14 million in investment funds from a wide variety of global investors. These investors included Nomura Holdings, MUFG Innovation Partners, Santander InnoVentures, and Blockchain Capital.
Securitize Making Moves
This year started off with a bang for Securitize. In January, the firm finalized a deal with AltoIRA. This deal was a major milestone for the entire security token sector because it was the first time that a platform received approval to allow US investors to invest in digital assets directly from their IRA. This momentum now continues with Sony jumping on board.
A Leader in the Blockchain Sector
Its been exciting to watch Securitize develop over the last few years. The firm has gone from a concept to a major player in the market. Today, Securitize is one of the most respected names in the game. Its no doubt that this stellar reputation is what caught Sony’s attention.
One thing is for sure, considering the level of interests Securitize garnished with this latest investor, its goal to modernize the capital markets is is in full swing.
This week, the tokenized securities trading platform iSTOX achieved a monumental milestone after the Monetary Authority of Singapore (MAS) granted the firm permission to begin operations. The news symbolizes a further maturing of the Asian blockchain market, as well as, the official entrance of a major player in the region.
iSTOX receiving the go-ahead from MAS comes after the firm successfully completed the Monetary Authority of Singapore (MAS)’s Fintech Regulatory Sandbox. The company was apart of this unique incubator since May 2019. The decision to add iSTOX came after regulators recognized the group as having strong potential in the market. Importantly, iSTOX conducted its first issuance while in the program in November 2019.
iSTOX Graduates from MAS Regulatory Sandbox
Discussing the important development, Danny Toe, Founder and CEO of ICHX Tech Pte Ltd (ICHX), the Singapore-based operator of the iSTOX platform, spoke on the importance of being the first team licensed as a capital markets services provider. He described the years of work that went into the project. He also took a moment to explain the concept’s overall vision to provide a better investing experience for all parties.
Ditch the Outdated Infrastructure
Toe isn’t the only person hyped about the progress made to date. Notably, iSTOX Chief Operating Officer Darius Liu chimed in on the milestone. He explained that the traditional markets have been stuck using the same core infrastructure for decades. He described how iSTOX will outperform these outdated business systems while remaining fully compliant.
iSTOX Graduates from MAS Regulatory Sandbox
In the past, Liu has spoken on the need to create open markets that can meet the needs of a global audience. In this manner, the financial markets can receive more liquidity. This open approach, combined with the advantages of tokenization, creates an ideal scenario in the market. Specifically, it enables the expansion of new market opportunities for series B startups, corporate debt, and hedge funds.
iSTOX Graduates from MAS Regulatory Sandbox – Added Transparency
Currently, many of these private market opportunities lack transparency. In addition to the market’s opaqueness, transaction delays and the involvement of numerous third parties increase the overall price of transactions. iSTOX believes that it can eliminate these issues.
Additionally, MAS Chief FinTech Officer, Sopnendu Mohanty chimed in on the importance of the iSTOX program to the market. He spoke on the success of the group’s sandbox program and its proportional regulatory approach to the market. He also said that MAS looks forward to working with other firms in the future.
iSTOX Graduates from MAS Regulatory Sandbox – Sparks Investor Interests
The iSTOX platform has been at the center of investor interests ever since its conception. The project garnished huge support from Asian investors over the last two years. For example, iSTOX received investment capital from the Singapore Exchange (SGX) and Heliconia in its early funding stages. Following that important campaign, iSTOX managed to secure additional investments from the Thai investment bank Kiatnakin Phatra Financial Group, the Japanese financial services firm Tokai Tokyo Financial Holdings, and the South Korean asset manager Hanwha Asset Management.
iSTOX
iSTOX entered the market with the goal to simplify investing in digitized assets such as tokenized securities. The firm focused on institutional investors and streamlining the issuance, custody and trading services surrounding their market participation. Now, iSTOX is ready to step out of the nest and take flight across the industry. For now, the market awaits iSTOX’s next move.