– First day of the event closes out with 2000 participated on 70 projects from 8 countries
– Major government officials such as Park Won-soon, Mayor of Seoul, Minister of Malta, Member of the Estonian Parliament Participated.
2019 Blockchain Convergence Summit : Chain Plus+ (Chain Plus) opened with great success, attended by around 2000 blockchain experts and general participants from South Korea and overseas.
Chain Plus is a forum co-organized by MTN (Money Today Network, the 3rd largest Economic Media Group) and global blockchain accelerator ‘Chainers’, which drew attention since the preparation of the event, and participated by more than 70 projects and 120 media from 8 countries worldwide.
According to Chainers, the event was planned to host with 1,500 applicants, but actually about 2,000 participants registered for the event.
In addition to general investors, various government officials, influencers, and industry representatives participated in the event. Particularly, government officials such as Park Won-soon, Mayor of Seoul, Silvio Schembri, Minister of Malta, and Kalle Palling, Member of Estonian Parliament participated with speech to share their opinions on the direction of government policy toward technological change.
“Year 2019 will be the first year of the blockchain industry’s major growth,” said the keynote speaker Park Won-soon, Mayor of Seoul, and added “The city has included concrete details in the master plan on building the ecosystem and innovation of administrative service in the blockchain.”
The first track of the event was a panel discussion of key government officials on the subject of “How should government policy adapt to the technological changes?” Song Hee-kyung, co-president of the 4th Industrial Revolution Forum of the National Assembly, stressed “It has been 10 years since the blockchain technology was introduced. The government needs to take strategic measures.”
Pyo Chul-min, the member of the Fourth Industrial Revolution Committee pointed out, “A number of ICOs have taken place due the easiness to raise funds, but the damage caused by the project failure is huge,” suggesting security-type fund raising as an alternative method for attracting capital for startups.
Perry Jung, the host of the event, said, “Year 2019 will be the first year of true application, based on the financial infrastructures such as security tokens and stable-coins,” and remarked “I hope Chain Plus can become a venue where the alternative ways of overcoming the limitations of blockchain and cryptocurrency can be discussed.”
Chain Plus is sponsored by the domestic and international global projects including WaykiChain, Lambda, Broctagon Fintech Group, Gibraltar Stock Exchange, MyToken, Membersheep, Cashfree, Paralism, Betstore9, ChartIQ, Covalent, Cumberland, DX.Exchange, Bitsdaq, ZB Capital, Cloudflare, Contents Protocol, EBC Foundation, WAAM, Transit Protocol, Contentos, Chain UP, Everball, Bitrock, Insolar, LARVOL, ClickVisibility, Edinarcoin, GMB, ROMAD and Yeeco,etc.
These excellent companies showed their amazing products and also shared their valuable opinions which brought the conference to a climax.
In the meantime, on the 24th, the second day of the event, global industry experts like Shin Hyun-seong, CEO of Terra, Tim Draper,founder of Draper Associates and Yao Yongjie, Chairman of Grand Shores Fund, are scheduled to participate to discuss the key issues and prospects of the blockchain industry including the security tokens (STO) and stable-coin.
BitBond Finance BmbH STO Hits €2.1 million
The enterprise lending solutions provider, BitBond Finance concluded its STO this week. The public crowdfunding event officially started in March of this year. In total, BitBond secured €2.1 million in funding from the STO. Interestingly, this event was the first regulated STO held in Germany.
Now, BitBond seeks to expand its platform’s service to include a host of other digitized products. These products are first to include tokenized bonds. Tokenized bonds, much like tokenized shares, utilize blockchain’s efficiency to reduce delays and costs associated with transactions.
The STO propelled BitBond into the spotlight. The media coverage alone was impressive with the company receiving over 1000 articles covering the event. Unsurprisingly, BitBond’s STO saw participation from 87 countries. Most of which, the firm has issued loans in.
Earlier in the year, the German securities regulator, BaFin, approved BitBond’s application. As one of the first platforms to be licensed, BitBond represents a shift in the traditional business systems employed. As part of the approval, the platform gained an International Securities Number. This number allows BitBond to remain compliant across borders. This is critical to the company’s all-inclusive strategy.
BitBond Finance Investors Benefits
Investors received BB1 tokens for their contributions. Token holders receive a profit share from the company’s new platform. According to STO details, investors receive 4% per annum to start off with. After a specified time, these returns will go up to as high as 8%. In total, 60% of BitBond’s future profits are earmarked for investors.
BitBond entered the lending market in 2013. At that time, it was among one of the first instant lending platforms to offer services worldwide. The company currently issues €1 million in loans a month. Now, BitBond intends to leverage its positioning to enter into the tokenized bond market in a major way.
BitBond will issue tokenized bonds using its own proprietary software. As part of the new licensing, the company handles, clearing, settlement, and custody of these digital assets. Tokenized bonds clear much faster than traditional bonds. For comparison, tokenized bonds can clear in hours, versus days. Now investors have a better alternative to consider.
BitBond’s lending platform has seen great success to date. The platform utilizes a blockchain-based peer-to-peer protocol to facilitate near-instant loan approval. The company provides access to funding to medium and small-sized businesses. The speed and global reach of the platform were previously unimaginable prior to the advent of blockchain technologies.
Traditional Financial Institutions
BitBond also works with traditional lending institutions. Earlier in the year, the firm partnered with a German online bank to send funds internationally. The program was a huge success which helped cement BitBond as a major player in the tokenization marketplace.
BitBond has shown that it has a strong understanding of the global marketplace and how blockchain technology can increase efficiency. More importantly, the firm continues to be a pioneer in the digital economy. You should expect to hear more big developments surrounding this platform in the coming weeks.
How to get an STO approved by German regulators – Thought Leaders
After over 130 security token prospectuses were submitted to BaFin, the German regulator, it was the Bitbond STO that was the first to be granted approval.
In 2016, Bitbond became the first blockchain business to be regulated as a financial institution in Germany. The next logical step was to crowdfund our growth – compliantly – with a bond issued on blockchain technology.
As the first, we had no guidelines to follow, but we learned a lot in the process that followed. Rather than keep these insights to ourselves, we want to share them, in the interests of growing the whole industry and encouraging adoption.
What makes an STO an attractive option?
The institutional mismanagement of money that triggered 2008’s global financial crisis has had profound effects on investor appetite for alternative products. Crowdfunding and micro-lending have been growing, which has enabled a new frontier: decentralized financial products.
Relying on no bank or centralised authority, decentralized finance encompasses cryptocurrencies and blockchain-powered financial products that are decentralized, relying on less middlemen or intermediaries.
Security Token Offerings (STOs) – where a company creates a digital asset that represents a tradable stake or asset, which it sells to investors in return for capital – have been a natural progression from the crowdfunding boom launched by Kickstarter in 2009 and crowdlending movement initiated by Topa and LendingClub.
The sale of a digitized version of a security, STOs have become an onboarding point for non-crypto investors to learn about digital assets. At the same time STOs are a cheaper, and more efficient tool for businesses to fundraise, with the added benefit of a compliant structure to adhere to.
So, what does it take to launch a regulated STO?
Step One: Get your business, and your story, in order
Obtaining regulatory approval for any financial product is not easy. It shouldn’t be. With emerging technology like an STO, the barriers become even steeper.
Before embarking on the road to regulation, you need to clarify your motivations within your business. What makes an STO the most efficient method of fundraising for your goals? How will a diverse pool of international investors offer more value to your business than a smaller pool of sophisticated investors or experienced VCs?
For Bitbond, it made sense to launch an STO to the public, as the core product is about creating access to finance for underserved demographics, in a compliant way.
Similarly, when Blockstack, a decentralized computing ecosystem, was looking to raise money in a decentralized and accessible way, it made sense for them to make use of the SEC’s crowdfunding regulation, Reg-A+.
When a business is built on the idea of decentralization, using a fundraising method that encourages wider participation and access is the logical route to take.
Step Two: Talk – and listen – to regulators
In Germany, regulators have defined cryptocurrencies and other blockchain-backed tokens as units of account, so they have to be treated as financial instruments. This means any kind of service for third parties in relation to cryptocurrencies or crypto tokens must be authorised by BaFin.
Whilst they judge on a case-by-case basis, any token or cryptocurrency project looking to facilitate the issuance, exchange or other services around tokens must make their case to BaFin.
When BaFin are presented with a prospectus, they must give feedback within 20 days, which is a short time, even when they are assessing a product they already know.
With emerging technologies, a different tactic is needed: the blockchain industry needs to talk to the regulators, not just on the products we’re building, but on the ecosystem at large.
In April 2018, Bitbond reached out to BaFin, to present a legal framework of the Bitbond STO. By opening the conversation with something tangible to build from, we could tailor our prospectus around their concerns.
Over the next months, we went back and forth with the regulators; much of conversation centred on how blockchain transactions work, what additional risks and opportunities stem from them, the unique features of the Bitbond offering and how the proof of ownership in the security works if there is no central clearing.
We took things back to basics, when talking to BaFin to provide a crash course in the fundamentals of blockchain. We answered numerous questions on how the blockchain works, what Ethereum and Stellar are and how transactions work on these protocols.
This gave them the language to interrogate our project – and helped us identify the main areas of concern and the risks BaFin wanted to see addressed in a prospectus.
By teaching them the context, including the fundamental pillars of blockchain technology, and the way tokens facilitate the use of that technology, we can help regulators make more informed decisions, and ask better questions.
Step 3: Prepare a prospectus that addresses concerns and regulations
They may bring administrative hassle, but regulators play an important role in the financial ecosystem. They hold businesses like us to account to maintain the stability of the financial system and protect consumers.
In Bitbond’s case, the idea for the STO came in February 2018, conversations began with the regulator in April, a prospectus was submitted at the end of October, with approval being granted in January 2019: nearly a year later.
This took longer than a standard securities application, but that was because the concept we were presenting was so new – there was nothing the regulators could compare it with.
Investing this time was worthwhile, as we now have the first mover advantage with the first regulated STO in Germany.
More than that, we have the privilege of paving the way for more German and European businesses to launch compliant STOs.
An STO remains a more efficient way of fundraising than going through a private VC fund or accredited investors: there is only one prospectus to prepare, rather than having to tailor many proposals to individual institutions or investment banks.
This prospectus must cover all conceivable risk factors that exist for investors. These range from unexpected rises in transaction fees reducing the profitability of the bond, through to the tax risks associated with holding an emerging asset class that is subject to legal changes.
Projections must be made, and justified. Assets and liabilities must be declared and broken down in a balance sheet. The target market must be identified, and characterised.
An extensive history of the issuer and its business activities must be laid out, in language that the investors will understand.
Once all the details have been laid out, there are far fewer intermediaries needed between the business and investors, which makes the raising process significantly leaner, more efficient, and easier to manage.
With these future savings, educating the regulators is a worthwhile investment.
Conclusion: Education and open-mindedness will improve access to alternative forms of finance
It is in the interests of all stakeholders in this space – from regulators to businesses to customers – for emerging technologies to operate within a compliant structure. We have already started working with other companies looking to gain the regulator’s approval and use our technology for the issuance process.
As well as a fundraising method, an STO has become a vehicle to teach investors about digital securities.
It is exciting that the process of getting approval for a prospectus can become an extension of this educational process, which can act as a catalyst for regulatory engagement.
BaFin’s willingness to interact, and learn from the industry is an exciting opportunity for Germany to step up as world leaders of innovative financial services and products.
If the industry continues to invest time and resources to educate and work together with regulators, we can create a framework for compliant STOs, which in turn provides a welcoming environment for the next generation of compliant digital securities.
DigiMax & Entoro to Collaborate as Advisors on Digital Security Offering
In the upcoming Leonovus Galaxa STO, a pair of promising companies have decided to collaborate as co-advisers. This would be United States based Entoro and, Canada based, DigiMax.
With a mutual goal shared between the companies, this collaboration was undertaken to capitalize on the strengths and weaknesses of each company.
U.S. versus Global
In their announcement, the companies indicate that, while Entoro has much to offer, their experience lies within the confines of the United States. DigiMax, on the other hand, has experience on a more global scale.
Between the two of these companies, Leonovus stands to benefit from a versatile, and competent, team of advisors. The companies note that, beyond this perk, the collaboration will allow for future referrals between one another, as their client base requires it.
In announcing their collaboration with one another, representatives from each, Entoro and DigiMax, took the time to comment. The following is what each had to say on the matter.
Chris Carl, CEO of DigiMax, stated,
“We are excited to be partnering with Entoro to assist one another in advising and funding our collective issuer clients…We believe that Entoro is the definitive leader in providing proper advisory services for issuers of digital securities in the United States and this is the kind of highly diligent and compliance-oriented company that DigiMax seeks to partner with. We believe there are many synergies to be gained for each of our companies from this formal collaboration with most of these benefits accruing to our clients.”
James C. Row, Managing Partner of Entoro Capital, stated,
“We view DigiMax as a global leader in bringing awareness of the importance of regulatory compliance to every step in the process of companies issuing digital securities and we are impressed with the global brand that DigiMax has built. We see a great deal of opportunity for both of our companies to accelerate as a result of this collaboration agreement. We have a high appreciation of the professional level of conduct by DigiMax from our observations working with them on our first client tougher.”
DigiMax is a Canadian company, based out of Toronto, Ontario. This young company has developed a suite of services built to facilitate capital generation events, such as STOs and DSOs.
CEO, Chris Carl, currently oversees company operations.
Operating out of Houston, Texas, Entoro functions primarily as an investment bank. Since launch, Entoro has expanded their services to facilitate blockchain ventures and digital securities.
Managing Partner, James C. Row, currently oversees company operations.
In Other News
Both, DigiMax and Entoro, have found themselves as regulars in our headlines. Over the past few months, each of these companies have made positive developments, as well as found themselves working on the same project. Check out the following articles to learn more about these events.
- BitBond Finance BmbH STO Hits €2.1 million July 17, 2019
- How to get an STO approved by German regulators – Thought Leaders July 16, 2019
- DigiMax & Entoro to Collaborate as Advisors on Digital Security Offering July 16, 2019
- Will Facebook Subsidiary, Calibra, See the Light of Day? July 15, 2019
- Mikko Ohtamaa, CTO at TokenMarket – Interview Series July 15, 2019