Tim DRAPER, one of the first investors of Tesla, Skype and Hotmail, and who was requested consultancy by Donald Trump on the cryptocurrencies regulation of the American financial system, joined the main list of speakers of Blockchain Economy Istanbul Summit!
Tim DRAPER, a technology billionaire and Bitcoin investor, is known for his 40,000 Bitcoin investments in 2014. In the same year, his prediction that a Bitcoin would exceed $ 10,000 within 3 years became true, and in December 2017, a Bitcoin price approached $ 20,000. Recently, he estimated that a Bitcoin will rise to $ 250,000 by 2022. DRAPER says that only cryptocurrencies will be used all over the world within 5 years.
Tim DRAPER, The Wall Street Analyst Tom LEE, the President of the Free Republic of Liberland Vit JEDLICKA, the IOTA co-founder Serguei Popov, Malta’s consultant on Blockchain Cal EVANS are all taking important part as one of the keynote speakers at the the largest Blockchain and Cryptocurrency Conference of the Region “Blockchain Economy Istanbul Summit.
In the period when the Bitcoin price is declining downwards, it can be a great opportunity for you to take full advantage of an early Bitcoin investor Tim DRAPER’s analysis on this point. Book your ticket now for the 20th February of 2019, taking place at the Haliç Congress Center of Istanbul!
“Blockchain Economy Istanbul Summit”
Venue: Haliç Congress Center, Istanbul
Date: 20 February 2019
Titles and Designations Among Industry Participants
Those that follow developments within the digital securities sector may have come across a variety of titles/designations given to industry participants. While a select few companies have set their sights on attaining a full scope of designations, most specialize in one area or another. This necessitates a high level of cooperation among companies, as issuing digital securities requires utilizing various services.
With Securitize recently attaining the title of ‘transfer agent’, now is as good a time as any to take a brief look at what positions, such as this, entail. Here are a few designations typically associated with digital securities, and a superficial look at the roles which they play.
Companies tasked with completing the roles of a placement agent typically function as a conduit for raising capital. A placement agent is usually hired by a company looking to raise capital through an STO/DSO or some other means of fundraising. Throughout this process, the placement agent will attempt to connect appropriate, and interested, parties (issuers & investors). In doing so, investors gain access to pre-vetted opportunities in their ‘wheelhouse’, while issuers benefit from access to a larger pool of investors.
Beyond simply providing token issuers access to their contact book, placement agents are able to provide certain levels of clout to relatively unknown companies through mere affiliation. In addition, they are often tasked with helping develop marketing strategies for token issuers, to more efficiently connect appropriate parties.
The following companies are examples of participants within the digital securities sector which hold the title of a placement agent.
The entire process of selling and distributing digital securities is contingent on finding a competent issuance platform. Digital securities require specific traits to be built into their coding, as they are required to be compliant with securities laws imposed by regulatory bodies, such as the SEC. This is done when they are created, using issuance protocols based on blockchain technologies, such as Polymath’s well known ST-20.
The following companies are examples of participants within the digital securities sector which act as issuance platforms.
A broker-dealer refers to a licenced company which buys and sells securities. A broker-dealer has the ability to act on behalf of, either, themselves or a client. This is a fluctuating designation which is broken down as follows:
- When securities are traded on behalf of a client, the company is assuming the role of a broker.
- When securities are traded on behalf of the company, itself, the company is assuming the role of a dealer.
The following companies are examples of participants within the digital securities sector which hold the title of a broker-dealer.
In a world which is becoming increasingly connected, new challenges regarding security measures are arising every day. This places increased importance on companies assuming the roles of custodians.
Custodians within the digital securities sector are tasked with safely storing digital assets. While their means for achieving this may vary, their presence within the sector is extremely important.
Warranted or not, blockchain based assets are often viewed together. This means that when an unregulated exchange with poor security measures is hacked, it paints a bleak picture of similar assets. To continue the upwards trajectory of blockchain based assets (digital securities), regulated custodians are of key importance. Through stringent security measures, they are able to provide a safe home for valuable assets, as well as piece of mind for their holders.
The following companies are examples of participants within the digital securities sector which provide custodial services.
For participating parties to benefit from the oft-touted liquidity associated with digital securities, these assets need a place to call home. Marketplace providers offer this, as they facilitate secondary market trading of digital securities. By facilitating the buying/selling of digital securities, investors can now easily enter and exit their positions.
The following companies are examples of participants within the digital securities sector which act as Marketplace Providers.
For companies which undergo the tokenization process and distribute tokens, a transfer agent is vital. Companies which assume this role are typically tasked with accurately tracking the activity and ownership of distributed assets. This means providing token issuers with an accurate picture of who is in possession of their digital assets, and in some instances doling out dividends to holders.
The SEC breaks down the roles of a transfer agent into the following 3 main categories.
- Issue and cancel certificates to reflect changes in ownership.
- Act as an intermediary for the company.
- Handle lost, destroyed, or stolen certificates
The following companies are examples of participants, within the digital securities sector, which hold the title of a transfer agent.
Jockeying for Position
While there are many roles and designations within the sector, these are a few of the most prominent and important found in digital securities. With the digital securities sector still in a nascent stage of growth, there are various companies jockeying for position as the ‘go-to’ entity for their specialities.
In time, we will eventually see the cream rise to the top, as select companies stand out from the pack with the services they offer.
BlockState Gains Clarity on STO Taxation Within Switzerland
No Tax. No Vat.
BlockState, a Swiss digital securities issuance platform, has recently closed their very own STO. Upon doing so, multiple questions were raised with regard to how capital, brought in during this event, would be taxed.
The STO hosted by BlockState represented the first of its kind in the region, making the young company a trailblazer within the digital securities sector.
As stated by BlockState, confusion remains on the taxation of capital raised through STOs…until now.
In an effort to gain clarity on the situation, and set a precedent moving forward, BlockState turned to PST Legal. This law firm was tasked with gaining clarity from Swiss regulators. Their efforts were successful, with recent rulings being doled out.
It was ruled that capital raised through such means would NOT be subjected to either profit tax, nor value-added-tax (VAT). Rather, much like traditional capital raises, funds garnered through STOs structured in such as manner would only be subjected to ‘security issue tax’.
By achieving this, BlockState has not only made their own path easier moving forward, but for others as well. This ruling provides future STOs with precedent and clarity on how their actions will be received by regulators.
In their release, BlockState comments on the development. They state that it was concluded that the,
“…issuance and the profit on the sale of own shares through a security token offering in this specific case does not trigger profit tax and added-value tax, but security issue tax. This is a unique tax clarification for the BlockState’s security token offering model and marks the first time that a Swiss tax authority has issued a ruling on the tax classification of an equity STO.”
With this development, BlockState commented on what it means to them. It was stated,
“We are excited to be part of the progress in this space, not only developing leading technology and legal frameworks, but being able to play an active role in the regulatory conversation around security tokenisation.”
BlockState is a Switzerland based company, which was founded in 2018. Above all, Blockstate acts as an issuance platform for companies looking to tokenize assets. The company operates with a mission of unlocking trapped wealth, through the use of blockchain technologies.
CEO, Paul Claudius, currently oversees company operations.
With their progressive approach to blockchain, and companies taking part within the industry, Switzerland is fast becoming a hub for the technology. This has led to the town of Zug being dubbed ‘Crypto Valley’.
Companies involved with blockchain have been drawn to the area, as the Swiss government has taken the initiative to provide clarity on law and regulations governing the sector. Being afforded this clarity allows for these companies to operate efficiently, and without fear of repercussions for actions taken.
In Other News
In months past, we have detailed development pertaining to BlockState multiple times. From their migration of ERC tokens, to hosting STOs on behalf of others, BlockState has remained busy. The following articles dive deeper into each of these events
Prime Trust to Utilize Various Services Provided by Vertalo
On-Chain Cap Table
Building off of a relationship first established in 2018, Prime Trust and Vertalo have announced new growth in this partnership.
This development will see Prime Trust utilize, and benefit, from services provided by Vertalo, including cap-table management.
For a company to be successful, it is of great importance to have a thorough knowledge of its equity breakdown – including values, dilution, ownership, etc. This tedious process is made simple through services provided by companies such as Vertalo.
In their announcement, this paring of companies notes various areas in which they will find themselves cooperating. The following points were provided in their press release, describing how they will be working together.
- The creation and support of on-chain cap tables for thousands of Prime Trust crowdfunding issuers through the Vertalo Registry, a service which is directly connected to Prime Trust’s Custody, KYC/AML, escrow, and onboarding services
- Preferential pricing for Prime Trust clients who choose to utilize Vertalo’s B2B SaaS cap table platform, and simple opt-out for those who wish to use a spreadsheet or other platform to manage their investor file
- The option for participating issuers (Prime Trust clients) to tokenize their cap tables from within their branded Vertalo interface at any time in the future, using any issuance platform or smart contract that is supported by an exchange and partnered with Vertalo
Representatives from each company took the time to elaborate on this partnership, and what it means moving forward. The following is what each had to say on the matter.
Kevin Lehtiniitty, CPO for Prime Trust, states,
“Vertalo has come to the realization that mass adoption of asset tokenization requires that blockchain specific concepts such as wallets and addresses be black-boxed from the typical retail user. We at Prime Trust share the belief with the Vertalo team that crossing the chasm requires abstraction and simplicity, which makes us excited to announce this partnership. Using Vertalo’s very intuitive tools, any issuers from our crowdfunding business will be able to manage and tokenize their securities as well as provide their investors with UI access to view their investment. We’re very excited to continue working with the team at Vertalo on expanding our partnership and offering this tokenization potential to all our issuers. There’s much more to come with Vertalo which we’ll share with the world when the time is right.”
Dave Hendricks, CEO of Vertalo, states,
“Vertalo’s partnership with Prime Trust will provide their thousands of clients with Vertalo’s on-chain cap table, issuer and investor interfaces, enabling Prime Trust’s clients to directly connect with their investors for the goal of improving the investor relations and ownership experience. Prime Trust clients who convert to Vertalo will also be provided with ultra-low cost ‘optional tokenization’ of their cap table in the event that they want to convert their paper shares to digital assets for trading on Vertalo partners such as OpenFinance. This deep integration between Prime Trust and Vertalo builds on more than a year of co-development effort that has sought to simplify the purchase, management and sale of digital assets for both issuers and investors. We’re proud to work with the team at Prime Trust and look forward to announcing more useful innovations together soon.”
Operating out of Las Vegas, Prime Trust was founded in 2016. The team at Prime Trust has developed a variety of offerings serving the digital securities sector. This includes custody, escrow, compliance, and more.
CEO, Scott Purcell, currently oversees company operations.
Operating out of Texas, Vertalo first launched in 2017. The company offers a variety of services tailored towards the blockchain industry – ranging from cap table management, to an issuance platform, and more. To date, they remain one of the most active companies within the digital securities sector.
In our on-going interview series, we have had the pleasure of interviewing CEO, Dave Hendricks. Visit this interview below to learn more about Vertalo and their plans for the future.
In Other News
Each of the companies discussed here today have caught our attention on multiple occasions over the past year. The following articles elaborate on a few of the developments which each have made during this time.