Digital Security Token Sale
As expectations and excitement for the burgeoning digital securities sector continues to build, it is important for those building infrastructure to deliver.
This DSO will see investors given the opportunity to become shareholders in a VC fund targeted primarily at early-stage firms in the New York area.
As a result, by choosing to tap into SharesPost’s extensive network, CityBlock Capital will gain access to over 50,000 accredited investors of varying ilk.
Representatives from each company spoke on this development in their press release.
“The NYCQ Fund is intended to provide accredited investors with diversified access to blockchain infrastructure investments normally accessible only by institutional investors. CityBlock Capital believes that blockchain technology will deliver a much-needed modernization of the current financial system. SharesPost’s blockchain expertise, world-class technology platform, and global visibility and reach made it an obvious choice for CityBlock Capital.”
“We see a great opportunity for the investors in our marketplace to participate in this next wave of disruption and innovation in the financial services industry. We are also excited to be at the forefront of tokenizing traditional assets like venture capital funds.”
“We will continue to provide token issuers with a complete capital markets solution that includes primary issuance, secondary trading, and the investor relations tools to tell their story to the investment community.”
CityBlock Capital is based out of San Francisco, like many other blockchain related companies. Since being founded in 2018, the company has worked to provide global investors the opportunity for growth through tokenized VC funds.
SharesPost is also based out of San Francisco, and was founded in 2009. They have since grown to offer various services. For example, these include playing the role of an SEC registered broker/dealer, providing an ATS, and more. In this time, the company has gone on to become a leader in secondary market solutions.
In Other News
Both CityBlock Capital, and SharesPost have been the subject of our attention in the past. For instance, here are some of the articles we’ve written detailing both the companies themselves, and developments involving them.
Protos – Worlds 1st Tokenized Hedge Fund Trades Publicly
The world of tokenized assets continues to expand into the traditional financial sector. This month, the world’s first tokenized hedge fund, Protos (PRTS), became available to public investors via the OpenFinance trading platform.
The Protos hedge fund reads like a whos-who of early crypto projects including classics like Bitcoin, Ethereum, and Monero. The fund initially made headlines after Protos successfully sold over $6.5 million worth of tokens during its initial release. Now, developers are ready to allow Main Street investors a chance to trade this diverse investment instrument.
The Protos fund trades on the OpenFinance Network which is an SEC-registered Alternative Trading System (ATS). As an ATS, OFN can offer users additional functionalities not available to traditional investors. These benefits include faster transactions, lower fees, and the ability to trade 24-hours a day. Comparingly, Wall Street investors can only trade hedge funds during the hours of 9:30 – 4:00 pm. Also, trading closes on national holidays.
Protos Hedge Fund
Protos investors gain access to a variety of early blockchain projects. These projects include Bitcoin, Ethereum, Monero, Ada, XRP and zCash to name just a few. Speaking on what projects made the cut, company executives stated that the fund includes a host of highly liquid projects.
Additionally, Protos partnered with a number of additional token issuance platforms including Polymath to make the project a success. The Photos tokenized hedge fund operates as a security token per SEC guidelines. Notably, the token utilizes the Securitize DS Protocol to ensure lifetime compliance.
OpenFinance Network – OFN
OpenFinance is one of only a few security token exchanges. Currently, OFN lists six security tokens including the highly publicized Spice VC token. According to the SEC registration, OFN’s license allows the platform to trade Reg D, Reg A+, Reg CF, and Reg S exemptions.
In a recent interview, OFN CEO Juan Hernandez praised the benefits of Reg A+ listings. He spoke on how companies can list tokens faster and with fewer requirements. Also, firms can raise up to $50 million in each Reg A+ campaign. When tokenized, Reg A+ crowdfunding events provide even further incentives.
For example, in the past, only accredited investors could participate in these events. An accredited investor must show at least $1 million in liquid assets. As you could imagine, the majority of investors were left out of the loop. This strategy hurt companies the most because they were unable to accept more funds. Tokenization allows companies to receive funding from any investor globally.
SEC Opens Doors to Reg A+ Token Offerings
The SEC’s recent decision to begin Reg A+ approvals provides companies with some guidance as to how to proceed with an STO legally. In the past, companies complained about a lack of transparency in the sector. This lack of clarity creates a roadblock to large scale adoption. Today, Hernandez believes the advantages of tokenization are undeniable, and that investors will steer the market towards these services as they become more widely understood.
Protos Envisions the Future
The Protos hedge fund is a glimpse of what the financial markets will hold in the future. The fund’s diverse holdings are ideal for investors that desire to own a piece of the most important crypto projects released to date.
Coinbase Custody Adds Support for Digital Security ‘BCAP’
This means that investors now have a reliable service to not only store their BCAP tokens, but to deposit and withdraw them as well.
Ideally, this announcement of support will have broken the ice – meaning we will hopefully see Coinbase Custody bring support for an increasing amount of similar tokens.
Since day one, reliable custody solutions have been noted by many as one of the major hurdles to achieving mainstream adoption of digital securities. Recognizing this, various companies have been working hard to develop their own solution. Coinbase custody represents one of these offerings, and in its short time since launch, has become one of the industry’s most popular services.
To date, Coinbase custody manages over $1 billion in funds, represented by over 30 assets – now including BCAP.
— Coinbase Custody (@CoinbaseCustody) June 5, 2019
Beyond the Coinbase tweet, multiple noteworthy names in the sector commented on the announcement. This includes, both, Carlos Domingo (CEO of Securitize) and Jamie Finn (President of Securitize).
— Carlos Domingo (@carlosdomingo) June 5, 2019
— 🙈 Jamie Finn (@finnstr) June 5, 2019
Beyond the service they offer, Blockchain Capital is notable as they represent one of the very first security tokens to be offered to investors. This digital security was developed through use of the ‘DS Protocol’ – a product of industry leading issuance platform, Securitize.
Company operations are headquartered in San Francisco, and overseen by Managing Partners, P. Bart Stephens and W. Bradford Stephens.
Coinbase is a Seattle based company, which operates as a service provider within the world of cryptocurrencies and blockchain. These range from merchant services, to custody solutions, and trading capabilities.
Despite their standing within the industry, and the services developed by their team, Coinbase has notably struggled to retain talent in recent months. We have seen the departure of multiple high-level employees. The most recent of which is the Coinbase CTO, Balaji Srinivasan.
Company operations are overseen by CEO, Brian Armstrong.
In Other News
Custody solution are a vital component to creating a flexible and reliable foundation within digital securities. Here are a few articles discussing the adoption, and launch, of various custody solutions over recent months.
SPiCE VC Continues Portfolio Expansion with InvestaCrowd
Through this investment, SPiCE token holders will now gain exposure to the growing InvestaCrowd. A digital securities platform that operates under a licence given by the Monetary Authority of Singapore. The goal of InvestaCrowd is to not only provide services as an issuance platform for digital securities, but to develop a trading exchange. The development of an exchange is key to achieving the oft touted liquidity that digital securities stand to offer investors.
With this news, the SPiCE VC portfolio now totals 11 promising companies. The following is a list of these projects.
As made obvious by this list, SPiCE VC is comprised of both promising start-ups and heavy hitters within the burgeoning digital securities sector.
The following was a statement made in the press release, regarding the inclusion of InvestaCrowd into the SPiCE VC portfolio.
Tal Elyashiv, Co-Founder of SPiCE VC, stated,
“We are excited about this investment and the partnership with InvestaCrowd. As one of the leading investment banking platforms, and in light of the strong expected growth in tokenizing assets through Digital Securities, InvestaCrowd is set to be one of the fastest growing platforms in the region.”
InvestaCrowd is a Singaporean company, which was founded in 2015. They market themselves as the leading digital securities platform within Asia. They have accomplished this by offering not only the issuance of digital securities, but promise of eventual secondary market trading as well.
SPiCE VC is a venture capital fund tailored towards companies in the blockchain industry. Led by Carlos Domingo, Tal Elyashiv, and Ami Ben-David, SPiCE was one of the first in the world to successfully complete their own digital security offering.
The aforementioned DSO took place in the tail end of 2017.
In Other News
Here are a few articles detailing recent events in the world of digital securities. Of note, is a recent article detailing the very same SPiCE VC discussed here today.