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Newtown Partners Releases In-depth Security Token Industry Overview

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Newtown Partners Security Token Industry Overview

Security token investors have much to celebrate this week as the San-Francisco based consulting firm, Newtown Partners, released their long-awaited security token market overview. The primer is one of the first to cover the developing security token sector. The report provides investors with valuable insight into the current state of the market.

Additionally, the paper highlights the past developments of the space and the emergence of major platforms. The security token market expanded significantly over the last year. Both investors and businesses entered this sector with the goal of reducing risk and improving efficiency in the market. The rate at which this influx occurred left new security token users with a serious lack of reliable market information.

Recognizing the lack of reliable market statistics, Newtown Partners has set out to add some much-needed clarity to the industry. The report includes insightful information such as the “Evolution of the Narrative Around Security Tokens.” In essence, this primer provides you with all the information you need to get up to speed in the security token sector.

Newtown Partners

Newton Partners entered the market in 2016 as a blockchain advisory firm. The company specializes in token economy design, implementation, and development. The company has a long list of accomplishments in the blockchain space including working on Augmentors, Civic, and Wala.

The firm’s founders, Llew Claasen and Vinny Lingham, are no stranger to the crypto sector. Claasen is the Executive Director of the Bitcoin Foundation in the US. He works very closely with numerous countries’ regulatory agencies. Lingham also has a very strong technical background gained through his years of experience working in Silicon Valley.

Newtown Partners via Twitter

Newtown Partners via Twitter

Market Landscape

One of the most interesting sections in this primer is the Market Landscape information. Here, the primer describes the different type of regulations currently in use. Additionally, a chart is included that covers the most blockchain active countries stance on the market including their regulatory framework.

The data includes a plethora of helpful visuals including a partnership landscape chart. You can see which firms hold the most market influence.  According to the data, Polymath has the most strategic partnerships at this time. There is also a section regarding the different types of platforms, their functionalities, and a list of examples of each kind. These include categories such as:

  • Token Exchanges
  • Broker-Dealer
  • Issuance
  • Hybrid Platforms
  • Incumbent Stock Exchanges
  • Ancillary Projects
  • In Production

STO Overview

Newtown Partners include an in-depth analysis of the most significant STOs that occurred to date. According to the data, tZero holds the title as the most successful STO to date. The platform secured $134 million during their STO.

Concerns

The “Concerns and Areas Still to Be Proven” section of the paper highlights difficulties that must be overcome in order for the security token sector to flourish. The paper lists liquidity, lack of infrastructure, and the shift from intermediary services to Peer-to-Peer as the main problems facing full-scale adoption. The report explains how certain third-party intermediaries are difficult to codify at this time.

Conclusion

You have to hand it to Newfound Partners for putting together a well thought out primer. This document sheds some light on the entire security token sector. This information is sure to bolster confidence in the market and further investors’ desire to participate in this emerging technology. You can download the full primer here.

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David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com

Security Token News

BlockState Gains Clarity on STO Taxation Within Switzerland

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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.

Clarity

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.

Commentary

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

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.

Zug, Switzerland

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

BlockState Hosts First STO for Streetlife International

BlockState to Add ERC Tokens to Corda

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Prime Trust to Utilize Various Services Provided by Vertalo

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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.

Shared Responsibilities

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

Commentary

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.”

Prime Trust

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.

Vertalo

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.

Interview Series – Dave Hendricks, CEO of Vertalo

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.

Prime Trust Ramps up Security Measures with Help from Fireblocks

Vertalo Releases V-Token Software for Usage during Tokenization

Vertalo and tZERO See Influx of Talent as Multiple hiring’s are Made

 

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RISE Secures Broker-Dealer in Entoro Capital

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RISE Secures Broker-Dealer in Entoro Capital

Brought to you by…

RISE Wealth Technologies has announced that they have secured a broker-dealer for their currently live security token offering. This role has been filled by Entoro Capital, and will see them provide their services immediately.

In their current STO, RISE has set out with a goal of raising $120 million in funding. These funds are being raised, as the company looks to fuel their continued expansion and product development.

For investors that take part in the STO, they will be rewarded with a variety of benefits.

  • Regular Dividends garnered from various platform features
  • 4% p.a. Extra Payback in addition to Profit Payouts
  • Entitlement to Proceeds should RISE undergo an IPO

Commentary

Upon making their announcement, representatives from each, Entoro Capital and Rise, took the time to comment. The following is what each had to say on the development.

James C. Row, Managing Partner at Entoro Capital, stated,

“RISE is led by serial-entrepreneurs with a strong management team and a proven track record, which was crucial to us…A strong confidence in the team is paired with a shared belief that the future in asset management will be technology-driven. This makes RISE a perfect fit for Entoro.”

Stefan Tittel, CEO of RISE, stated,

“We are excited to be partnering with Entoro who has proven to be an experienced partner for companies within the FinTech industry…Their strong cross-industrial network has for years been a valuable asset to many partnerships. With the Broker-Dealer Agreement for Capital Raise we anticipate a great deal of mutually beneficial opportunities and synergies for both companies – with most of these benefits accruing to our clients.”

RISE Wealth Technologies

RISE has operated since 2012, within Grunwald, Germany. Through the use of AI, the team at RISE have developed a set of trading algorithms. These are built to provide retail investors with access to professional style trading tactics.

CEO, Stefan Tittel, currently oversees company operations.

We recently covered RISE, as they look to raise capital through and STO. Check out the following article to learn more about this event.

RISE Wealth Technologies Aim for a $120 million Security Token Offering

Entoro Capital

Operating out of Houston, Texas, Entoro Capital is an investment bank that has shown great interest in blockchain technologies. This interest has led them to develop services and platforms such as OfferBoard, Entoro Xpress, and more.

Managing Partner, James C. Row, currently oversees company operations.

Strategic Partnerships Abound

This is not the first time that Entoro has played a pivotal role in an STO, or as half of a strategic partnership. The following articles discuss various examples demonstrating their rapid development and adoption as of late.

Elite Mining – The Future of Mining is Green

DigiMax & Entoro to Collaborate as Advisors on Digital Security Offering

Entoro Eyes Secondary Markets Through Partnership with Unicorn

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